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BUILDING THE PANAMA CANAL 

Drill men at work in cut at Haut Obispo. 

Copyright, 1906, by Underwood A Underwood, New Yorl 



COST-ANALYSIS 
ENGINEERING 



INSTRUCTION PAPER 



PREPARED BY 

Richard T. Dana 

Consulting Engineer 

American Society of Civil Engineers, 

Chief Engineer, Construction Service Company 

"With Introduction b3" 

Halbert P. Gillette, C. E. 

Consulting Engineer 

American Society of Civil Engineers, 

Managing Editor '■Engineering-Contracting," 

Author of "Handbook of Cost Data for Contractors 

and Engineers," Etc. 



AMERICAN SCHOOL OF CORRESPONDENCE 
CHICAGO ILLINOIS 



U.S.A. 






LIBRARY of CONGRESS 
Two Copies Received 

JAN 13 1909 

Copyright 



OLASS oJ. XXc. No, 



Copyright 1908 by 
American School, of Correspondence 



Entered at Stationers' Hall, London 
All Rights Reserved 



COST-ANALYSIS ENGINEERING 



Definition. Cost-Analysis Engineering is that branch of Engi- 
neering which has for its object the analysis of costs of construction 
or of operation, with a view to effecting a greater economy of produc- 
tion, and with a view to securing accuracy in estimating the probable 
cost of projected structures or operations. 

The Modern Manager a Cost=Analysis Engineer. It takes few 
men to design machines and structures, but it takes many men to 
superintend their operation. Therefore the great field of activity for 
the engineer of the future is in the field of operation rather than of de- 
sign. 

Until very recent years, engineers have rested satisfied with being 
designers of labor-saving appliances. Now, however, they are begin- 
ning to assume the broader and more profitable function of operating 
the plants which their brains have created. To handle the ordinary 
industrial enterprise successfully, involves: 

First, the application of engineering ability in selecting and improv- 
ing the machines used; 

Second, managerial ability in organizing the workmen, and in stimu- 
lating them to produce a large output economically; 

Third, advertising ability to sell the product. 

The man who combines in himself the maximum sum of these 
three abilities is the man best adapted to succeed as the executive of 
an industrial enterprise. Since the introduction of systems of cost 
analysis and unit-payments for work done, engineers have become 
best qualified to act as managers of manufacturing plants. We in- 
clude contracting and railroading among manufacturing industries, 
for the contractor manufactures structures, and the railroader man- 
ufactures transportation. 

Before cost analysis had been developed to its present stage of 
excellence, the successful manager of men was usually one who had 
relied upon his lynx eyes and his knowledge of the weaknesses of hu- 
man nature. He was often a man who owed his success largely to 
the fear he could inspire in his subordinates. He was domineering; 
he held his men to their tasks; he was, indeed, an industrial captain; 

Copyright, 1908, by American School of Correspondence. 



COST-ANALYSIS ENGINEERING 



and he used army discipline. He regarded every worker as a thief 
who would not hesitate at petty larceny of time, even in the face of the 
foreman, and who delighted in grand larceny behind his back. His 
foremen were his spies; and he set himself to spy upon his foremen. 
But cost-analysis engineering is evolving a wholly different class of 
managers and foremen. 

To most people, a cost-keeping system means nothing but a sort 
of bookkeeping; and they are unable to understand how a bookkeeper 
can develop into a successful manager. But the truth is that modern 
cost keeping involves cost analysis, and cost analysis involves a study 
and comparison of methods and machines, and such a study leads to 
improvements and to commercial success. 

Cost keeping, in the sense that we use the term, has for its main 
object the determination of the efficiency of men. A proper system 
of cost keeping tells you daily what each workman or each gang of 
workmen has accomplished. It is better than a foreman, for it can- 
not "stand in" with the men. It is better than a foreman, for it costs 
you less and it tells you more. A cost-keeping system tells you who 
are your good men, and who are your lazy men. It shows you whom 
to discharge, and whom to promote. It tells you whose wages are too 
high, and whose are not high enough. And, finally, it leads to that 
ideal condition of industrial organization known as profit-sharing. 
How often have we read in novels of Utopia, where all men share in 
the profits of all business; and how often have we smiled with incre- 
dulity at the prospect ? Yet Utopia is right here in America, in spots ; 
and it is a Utopia far more rational than that of the dreamers. There 
are many firms that pay their men on a unit-price or bonus system. 
This is profit-sharing, and it is a profit-sharing begotten by the use of 
cost-keeping systems; for, when a manager has learned by cost keep- 
ing that certain men or groups of men produce more than others, he 
soon perceives the advantage of stimulating them to further use of 
brain and muscle by paying them either a bonus for each unit pro- 
duced in excess of a prescribed minimum, or a unit-price for each 
piece of work performed. The men invariably respond to this stim- 
ulus, and often in a remarkable degree. It is nothing unusual for a 
man to increase his output 50 per cent upon the introduction of a 
bonus system of payment; and there are many instances of increase 
amounting to 200 per cent. Each man then becomes a contractor, 



COST-ANALYSIS ENGINEERING 



and works with the zeal of a contractor, for his earnings increase as 
his energy and ability increase. This is practical profit-sharing that 
any workman can understand. It is not something vague and intangi- 
ble, like 5 per cent per annum. It is something very real and imme- 
diate, for a man can feel it in the pay envelope at the end of every week. 

Cost keeping, then, leads to better management, although dis- 
pensing largely with submanagers. It substitutes the record card for 
the "big stick,"yet the record card itself is the biggest stick ever devised. 

The Science of Management. The managing of industrial enter- 
prises is still more or less of an art ; but the art is fast passing through 
the period of evolution that produces a science. There are, unques- 
tionably, certain underlying principles of management which can be 
summarized into rules or laws. These rules or laws constitute the 
science of management, and it is our purpose to present certain of the 
more important laws of management. 

Individual Incentive. When a group of men undertake to do a 
certain piece of work, such as shoveling earth into a wagon, the ten- 
dency is for each man to do as little as his neighbor. The inevitable 
result is that the shovels move with rhythmic precision, and the slow- 
est man becomes the pacemaker for the rest. If any one of the men 
is ambitious to do a larger day's work, he is deterred by the knowledge 
that his employer will never know that it is he to whom the credit 
is due for a larger output. Then, too, the other men are apt to up- 
braid an ambitious man, and urge him not to set a "bad example" by 
working fast. To offset this tendency to fall to the lowest level of 
efficiency, employers have placed foremen over their employees, the 
duty of these foremen being to accelerate the motions of the men in any 
way possible. Each foreman has an individual incentive to get work 
done economically, for his employer studies the total amount of work 
done by the gang under the foreman, and rewards or punishes the 
foreman accordingly, the reward usually consisting of praise and an 
increase in salary. But the workmen under such a foreman have 
no individual incentive, and they will shirk their tasks as far as pos- 
sible. Clearly, then, the first law of management is to create an indi- 
vidual incentive for every employee to do his best. 

Creating Individual Incentive in a Gang. There are, and 
always will be, certain kinds of work that must be performed by a 
group of men working together, or, as we shall call it, a gang of men. 



COST-ANALYSIS ENGINEERING 



When this is the case, the first step to be taken is to devise a method of 
readily and accurately measuring the work performed each day — 
not each week or each month — by the gang. The next step is to notify 
the men that, for all work performed daily in excess of a specified 
number of units of work, a bonus or premium will be paid for each 
excess unit. Of this bonus, the foreman will get a specified percent- 
age, and the men will divide the rest among themselves. Thus a pow- 
erful individual incentive is created. It is true that certain men in the 
gang will remain less efficient than certain others, but the general 
average output will be greatly increased. The foreman himself will 
have enough incentive to see to it that the lazy or inefficient workmen 
in the gang are discharged, for it will no longer pay him to play the 
part of indulgence for the sake of being "a good fellow." 

Devising Ways of Dispensing with Gang Work. Simply be- 
cause it has always been the custom to do certain classes of work by 
gangs, should not deter a manager from endeavoring to devise a way 
of splitting the gang up into individual units. Indeed, it should be 
self-evident that if the creating of individual incentive is the funda- 
mental law of management, a great amount of study may profitably 
be devoted to increasing individual incentive by doing away with gang 
work entirely. To illustrate, let us assume that 12 men are engaged 
in shoveling earth into wagons, working in two gangs of 6 men, with 
one foreman supervising the 12. If a sufficient number of teams and 
wagons are used, there will always be 2 wagons in the pit being loaded, 
and 6 men shoveling into each wagon. As fast as a wagon is loaded, 
it pulls out, and an empty one takes its place. If a manager is told 
that he can do away with this system of gang work, he will usually 
reply that it is impossible. Nevertheless, it is possible to reduce this 
gang work to individual work in most instances, as follows : 

Instead of having 2 wagons and teams in the pit all the time, have 
6 wagons without teams — 6 empty wagons. Assign two men to each 
wagon. Provide a dividing board between the sides of each wagon, 
running either longitudinally or cross-wise, so that each man has his 
definite half of the wagon to fill. Then pair the men off according to 
their respective abilities, putting the two best men on one wagon, the 
two next best on another wagon, and so on. When a team brings an 
empty wagon into the pit, let it be unhooked from the empty wagon 



COST-ANALYSIS ENGINEERING 



and hooked to a loaded wagon, thus saving team time, which would 
otherwise be consumed in waiting for the wagon to be loaded. 

It is possible to give many illustrations of this sort, but not desir- 
able, for our object is to indicate the laws that should be applied, 
rather than to solve specific problems. The student of cost-analysis 
engineering will derive his greatest stimulus from applying the laws 
to specific cases that come under his own observations. 

Prompt Reward. Most men believe in Heaven, and many be- 
lieve in Hell; but few are greatly affected in their action by the hope of 
the one or the fear of the other. Any reward or punishment that is 
remote in the time of its application, has a relatively faint influence in 
determining the average man's conduct. To be most effective, the 
reward or punishment must follow swiftly upon the act. Hence a 
managerial policy that may be otherwise good is likely to fail if there 
is not a prompt reward for excellence. All profit-sharing systems have 
failed, principally because of failure to recognize the necessity of 
prompt reward, as well as because of failure to recognize the necessity 
of individual incentive. The lower the scale of intelligence, the more 
prompt should be the reward. A common laborer should receive at 
least a statement of what he has earned every day. If, in the morning, 
he receives a card stating that he earned $2.10 the previous day, he 
will go at his task with a vim, hoping to do better. But if he does not 
know what he has earned until the end of a week, his imagination is 
not apt to be vivid enough to spur him to do his best. 

One contractor, known to the authors, has a large blackboard on 
which the hourly record of his brickmasons is chalked up. He has 
found that this constant record of where they stand in the day's race 
is a splendid stimulus. 

Sufficient Reward. When a man produces more than has been 
his custom, he feels entitled to a very large percentage of his increased 
output. His sense of justice is keen on this matter, and rightly so. It 
is true that he is not entitled to all the increase, for his employer may 
have provided him with machines or tools of a better kind, for which 
payment must ultimately be made. Moreover, more rapid work with 
any machine means more rapid wearing-out of its parts, and a conse- 
quent expense to the employer. Finally, the employer who has used 
his brains to devise ways of increasing the output of the employees is 
entitled to a very substantial reward. No one begrudges Thomas 



6 COST-ANALYSTS ENGINEERING 

Edison his wealth. He has earned it by virtue of his inventions. 
In like manner, every man should be richly rewarded for every labor- 
saving machine or method which he creates or which he applies. 
However, employers are prone to try to take too large a part of the 
profit effected by an introduction of a system of unit-payment for work 
done. 

Mr. Fred W. Taylor says that a workman should receive 30 to 100 
per cent increase in wages upon the introduction of a piece-rate or 
bonus system of payment. Mr. Halsey says that the workman should 
receive one-third of increased value of his product resulting from an 
application of the bonus or premium system of payment. But the 
fact is that the employer should share liberally with his men; and, in 
the long run, the competition of other employers who are bidding for 
the services of workmen will force wages up to a point where the work- 
man secures all but a very moderate percentage of the value of his 
daily product. 

Educational Supervision. As previously stated, the old type of 
foreman mingles the functions of a spy with the functions of a mule- 
driver. The higher we go in the scale of human intelligence, how- 
ever, the more noticeable is the fact that the supervisors are teachers 
of the men they supervise. These supervisors, foremen, managers — 
call them what you may — have learned that it pays better to spend 
time in training their men than to spend time in tongue-thrashing. 
Only of late years has it been discovered that systematic training of 
the least intelligent of workmen pays equally as well as the training of 
the most intelligent. The manager who recognizes the necessity of 
educational supervision, undertakes, first, a careful time study of each 
class of work. Then he analyzes the results, and deduces methods of 
securing greater economy. Having evolved a method of procedure, 
he reduces it to writing, and furnishes his foremen with detailed 
written or printed instructions to be followed, or, where the workmen 
are intelligent enough, the instructions are given to them directly; 
otherwise it is the function of the foreman to instruct the workmen. 

Divorce of Planning from Performance. We have just spoken 
of the education of the workmen by the manager; but, before such 
education is possible, the manager must educate himself. In brief, 
he must study the problem and plan its most economic solution. 
According to the old-style method of management, each foreman was 



COST-ANALYSIS ENGINEERING 



left largely to his own resources in planning methods, and, added to 
this duty, he had several other duties to perform, such as "pounding 
the men on the back" when lazy, seeing that materials were promptly 
supplied, employing and discharging men, looking after the condition 
of machines, etc. This multiplicity of duties can be properly per- 
formed, only by a foreman possessed, of a multiplicity of talents. 
Since few foremen can comply with such a specification for brains, it 
follows that good foremen of the old style are rare indeed. The mod- 
ern system of management consists in taking away from the foreman 
the function of planning the work, and in providing a department that 
does all the planning. This planning department should be under 
the supervision of the Cost-Analysis Engineer, for it is he and his 
assistants who, by unit-timing of work and by cost keeping, are best 
able to ascertain what methods should be applied to get the most eco- 
nomic results. Having planned a method, the Cost- Analysis Engineer 
delegates its pursuance to one or more foremen. 

Subdivision of Duties. The previous rule of action comes under 
another, still more general in character — namely, the law of the sub- 
division of duties. Men are gifted with faculties and muscles that are 
extremely variable. One man will excel at running a rock drill, an- 
other at keeping time, another at surveying, and so on. It is clear, 
therefore, that the fewer the duties that any one man has to perform, 
the easier it is to find men who can perform the task well. But give a 
man many duties to perforin, and he is almost certain to do poorly in 
at least one respect, if not in several. One foreman may have a great 
knack at "keeping an eye on" machinery, and in having few break- 
downs and delays. Then it is the part of wisdom to burden him with 
no other duties, unless the magnitude of the work does not warrant 
dividing the duties among two or more men. Let him be the machinery 
and tool foreman, reporting directly to the Cost-Analysis Engineer, 
and subordinate to no other foreman. 

Another foreman may have a special knack at teaching workmen 
how to use tools and machines. Let him have no other duty but to see 
that the men have the proper tools, get them promptly, and use them 
properly. Let him be the gang foreman. 

According to the magnitude of the work, there may be different 
kinds of foremen, all coming in contact with the same men, perhaps, 
but each performing different functions. 



COST-ANALYSIS ENGINEERING 



Limitations of Military Organization. Most industrial organi- 
zations to-day resemble military organizations, with their generals and 
intermediate officers, down to sergeants, each man reporting to but 
one man higher in rank. There is little doubt that the present tend- 
ency in industrial organizations is to abandon the military system 
to a very large extent, and for the following reasons : 

A soldier has certain duties to perform, few in number, and simple 
in kind. Hence the man directly in command can control the actions 
of his subordinates easily and effectively. Control, moreover, should 
come invariably from the same officer, to avoid any possibility of dis- 
astrous confusion, and to insure the instant action oj a body of men as 
one single mass. 

On the other hand, industrial operations do not possess the same 
simplicity, particularly where men are using machines ; nor is there the 
necessity of action in mass. The* military organization, therefore, 
should be modified to suit the conditions; and one of these modifica- 
tions is the introduction of two or more foremen in charge of certain 
functions or duties of the same men or groups of men, as explained in 
the paragraph on Subdivision of Duties. 

Opposition to Change. All men have a certain mental inertia 
which makes them resist any change of their methods and habits. 
Foremen are particularly resistant to change, because of their custom 
of giving orders more frequently than receiving orders. Hence the 
Cost-Analysis Engineer who is trying to introduce modern methods is 
sure to meet with violent opposition from foremen; and the older the 
foreman, the more violent the opposition. When the Cost-Analysis 
Engineer introduces a new method, he must personally attend to every 
detail, or it will surely "go wrong," The old foreman will see to it 
that it does "go wrong," just to show that the "new-fangled ideas" are 
worthless. 

Opposition may also develop among labor unions, particularly 
if it is proposed to pay on the piece-rate plan — that is, to pay so and so 
much for each unit of work performed. The bonus plan and the pre- 
mium plan (to be described later) are schemes to overcome this opposi- 
tion to the piece-rate plan, but in essence they are all the same. 

No manager of men can attain great success unless he has grit 
enough and tact enough to overcome the opposition to change which 
he will encounter from all quarters. If he realizes in advance that 



COST-ANALYSIS ENGINEERING 



such opposition is as certain to manifest itself as it is certain that it 
takes power to change the direction or speed of motion of a heavy body, 
he will have possessed himself of one of the laws of successful manage- 
ment. 

A man cannot impart motion to a very heavy rock by violent 
impact of his own body against it; but he can separate it into frag- 
ments, and move each fragment by itself. In like manner, no attempt 
should be made to change all the methods of an industrial organiza- 
tion at one stroke. Separate it into elements, and take one element at 
a time, beginning with the simplest. Apply your cost-keeping sys- 
tem to that element — it may be only the hauling of materials with 
teams — and effect the change desired. Then take another element of 
the organization, and apply the system to it. Continue thus, frag- 
ment by fragment, and you will overcome the opposition that 
would otherwise resist your greatest effort. 

Respect Your Own Ability. One of the most common mistakes 
made by managers lies in assuming that a skilled workman necessarily 
knows better how to perform work than does the manager himself. A 
manager should first aim to familiarize himself with the methods used 
by the best workmen, and then, by an itemized time study, he should 
set his own wits to work to improve the methods. Workmen, for the 
most part, do their work just as robins build their nests — by the pat- 
tern of precedent. They put little or no brains into improving the proc- 
ess, because it usually means no money in their pockets to effect an 
improvement, and because they reason that an improvement that 
effects a saving in time may actually result in the discharge of some of 
their fellow workmen. It should be a cardinal law of management to 
give very little weight to the claims that workmen make as to their 
own skill or knowledge; and the same holds true as to foremen. Be- 
cause a man has blasted rock for twenty years, should not make his 
opinion of such force as to prevent a manager from undertaking to 
show that man how to do rock-blasting more economically. We have 
frequently effected great economies in rock-blasting after a time study 
occupying fewer weeks than the blaster had occupied of years in the 
same sort of work. The trained mind of the Cost-Analysis Engineer 
enables him to analyze costs and methods, and to develop improve- 
ments which no amount of so-called "practical experience" can effect. 

Weigh carefully every reason against any proposed change in 



10 COST-ANALYSIS ENGINEERING 

method, and act accordingly; but pay no attention whatsoever to pre- 
dictions of failure that are bare of reasons. Do not be influenced even 
by many positive statements that your proposed method has been tried 
and has failed; for its failure may have been purposely brought about, 
or some small condition essential to its success may have been absent. 

Therefore, respect your own ability. The manager who cannot 
improve upon methods used by his men is not fit to manage. 

Profit Does Not Mean Excellence. Many a manager points to the 
profits of his business as the profit of his ability. He forgets that to a 
plainsman a small hill looks like a mountain. The general level of 
mediocrity makes such managers fancy that they are quite extraordi- 
nary if their business shows a large profit. 

The Cost-Analysis Engineer can frequently take a profitable 
business and convert it into a wealth- producer beyond all dreams of 
the ordinary self-satisfied manager. Nor should the Cost-Analysis 
Engineer himself grow satisfied. There is positively no limit to tin 
economies in production which may be effected by the human brain. 

The Human Engine. The human body is an engine, or rather a 
boiler and engine combined. Its fuel is about 3 pounds of solid food 
daily, containing about as much energy as one pound of carbon or 
coal. One pound of coal will develop energy enough to perform about 
10,000,000 foot-pounds of work; that is, it will raise 10,000,000 pounds 
one foot high, if there is no loss of power. But in all boilers and engines 
there is a loss of power, due to heat lost by radiation, heat carried away 
in the escaping gases and solids, etc., and heat developed by friction. 
A steam boiler and engine suffers so much loss of heat energy from 
these sources, that it rarely develops an efficiency of more than 10 per 
cent of the theoretical energy of the coal consumed. Curiously 
enough, the human body is not much more efficient than a steam 
boiler and engine; so that, while the one pound of carbon fed into the 
human body has a theoretical energy of about 10,000,000 foot-pounds, 
the actual useful work performed by a man is seldom more than 
1,500,000 foot-pounds a day, or about 15 per cent of the theoretical 
energy of the food consumed. 

When a man is walking, his whole body rises and falls each step, 
the rise being about one-seventh of a foot. Hence, in walking 25 miles 
in a day, about 2,000 steps per mile, a man weighing 140 pounds does 
1,000,000 foot-pounds of work in raising the weight of his own body, 



COST- ANALYSIS ENGINEERING 11 

to say nothing of the energy consumed in swinging his legs. A man 
may walk the 25 miles in 10 hours, or he may walk it in 8 hours. In 
either case, he does substantially the same amount of work, and burns 
up substantially the same amount of food. 

It should be clear, therefore, that when workmen are doing inter- 
mittent work, with periods of comparative rest, they are capable of 
working correspondingly harder during the periods of exertion. Thus, 
in running a rock drill, the physical labor is light, except when shifting 
the drill or when changing drill bits. At such times, the men should 
be required to work with great vigor in order to reduce the lost time. 

It should also be clear that workmen should be taught to make no 
unnecessary movements of the body in doing work. Yet it is a fact 
that few workmen economize their energy by avoiding unnecessary 
motions. 

It should also be clear that it pays to house workmen at no great 
distance from their work, so as to reduce the labor of going to and 
from the work; for every foot-pound of energy spent in going or com- 
ing reduces by that much the available energy of the man. 

If it were practicable to measure the amount of resistance in- 
volved in doing each class of physical work, we could readily reduce 
to a science the setting of reasonable daily tasks. The authors are of 
the opinion that a careful study of resistances will eventually enable 
managers to fix certain tasks with great accuracy. To illustrate, let 
us assume that it is desired to know how much sand a workman should 
be able to shovel into a wagon box 5 feet from the ground in a day. 
It is not impracticable to measure the force required to push the shovel 
into the sand, and the distance pushed. The average w r eight of the 
earth on a shovel, and the weight of the shovel can be ascertained. 
The vertical height that this load is lifted, is easily measured. If the 
workman bends his body to fill the shovel, the weight of his body above 
the waist, multiplied by the height that the center of gravity of that 
weight travels will give the foot-pounds of work done in bending the 
body. And thus, by a calculation of each element of work done, an 
accurate forecast of the total possible work could be made. 

Such a study as this will often disclose an unsuspected lack of 
economy in using certain tools. From such a study, for example, it is 
perfectly clear that the long-handled shovel, universally used in the 
far West for shoveling sand, gravel, etc., is a more economical tool than 



12 COST-ANALYSIS ENGINEERING 

the short-handled shovel used in the East. Men have argued about 
this matter for years without coming to a definite conclusion, the 
reason being that workmen accustomed to the short-handled shove! 
prefer it, while workmen accustomed to the long-handled shovel show 
an equal preference for that type of tool. 

COST GETTING 

In taking of time and in the application of the cost of labor to 
the cost of work, there are probably as many systems as there are or- 
ganizations doing work; and even within any one organization using a 
well-defined system throughout its entire operations, there will be no 
two men making the same interpretation of the rules laid down, or 
— more especially — whose methods of attack will be the same. But 
in spite of these many variations of method, there are several primary 
systems which are standard, and which can be found in one form 
or another on all properly conducted work. 

The starting point of all cost getting is the taking of the time in 
the field, and it is here that the greatest variation in individual method 
is found. The most common way of taking this time record from 
which the pay-roll and the cost distribution is made, is for the time- 
keeper to go over the work with a notebook and put down therein with 
a pencil the number of each man and the particular part of the work 
that he is engaged on. 

Two systems of record keeping, of which small cards form the 
basis, are also in vogue. One of these systems uses what is known as 
punch-cards — that is, cards in which the records of time, distribution, 
and performance are made by means of an ordinary conductor's 
punch; and the other has the record made in a way somewhat similar 
to the entries in a notebook — a written record being made on the cards 
with a pencil. Another system bases its records upon reports turned 
in by foremen. 

Time=Keeper with Notebook. While the manner of taking time 
with a notebook varies according to the training and experience of the 
time-keeper, it may be said that there are in general two ways in which 
such notes are kept. In the first, the time-keeper has a list of the num- 
bers of all men on the work, and, as he goes over the work, simply 
checks oil' the numbers, showing that each particular man is at work 
and indicating upon what branch of the work he is engaged. 



COST-ANALYSIS ENGINEERING 13 

A more common way, however, is for the time-keeper to make 
headings corresponding to the distribution used in making up the 
office records, and to write under each of these headings the numbers 
of the men working upon the part of the work so named. This 
method is often simplified by the time-keeper becoming so familiar 
with the foreman, and the numbers of the men under the particular 
foreman, that he is able to dispense with the headings entirely, and 
simply use the foreman's name or number in place of it. This, of 
course, makes the time-keeper's notes more or less unintelligible to 
anyone but himself, and makes it necessary for him to do office work 
as well as his field work. Moreover, not being a permanent or intelli- 
gible record, it is impossible for even the man who made the notes to 
return to them in case any dispute arises or a mistake is found to have 
been made, and get information after the notes have "grown cold." 
The time-keeper becomes so familiar with the appearance of the men 
who are on the work, that he learns to know their numbers, and often 
attempts to put them down without seeing their numbered checks. 
This is often a source of error, as the uneducated foreign laborer is very 
liable to make a mistake in stating his number; and if he does, there 
will exist no record of his having worked that day, and he will get no 
pay for it. The apportioning of the cost of his labor to any work that 
he may have been on, will also be the cause of trouble. 

Of course, the time-keeper's memory serves him if any men are 
absent from the gang for any reason, and he is able to ask the foreman 
whether or not that particular man is working. A man may be away 
from the gang and be missed by the time-keeper altogether. In this 
case, no chance is given for correction of the record, unless the time- 
keeper goes over the work again soon after; and the consequence is 
that costs will be in error, and the men will be short of pay at the end 
of the month. This is especially liable to be true when night work 
is being done. 

Men may be changed from gang to gang, or a whole gang may be 
changed from one job to another, and the time-keeper knows nothing 
of it unless he happens to be on the spot at just the right time. Such 
a change would not show in his time record; and while the men would 
get credit for their full time, the distribution of costs would be much 
in error. The difficulty in recording such changes can be seen from 



14 



COST-ANALYSIS ENGINEERING 



the following extract from a report of a Consulting Engineer after 
inspecting work upon a road-making contract: 

' ' In one case, at 10 : 30, there were eight men carrying stone to the crusher, 
and three men on the crusher platform. Two others were in the cut, loosening 
earth and loading; and half an hour later, two of the four men who had been 
blasting were also loosening and loading. ' ' 

This, of course, indicates an unusually loose organization, but is an 

example of what a 
time-keeper with a 
notebook has to con- 
tend against. 

In case of emer- 
gency — savin steam 
shovel work — a 
train of dump cars 
goes over the side of 
a dump, and a track 
gang is called upon 
to help the regular 
dump gang so that 
the difficulty maybe 
overcome as soon as 
possible. The time- 
keeper might fail to 
make record of an 
hour or an hour and 
a-half which the 
track gang put on 
this work, because 
he did not see them 
at work at that par- 
ticular time. This, 
of course, affects the 



Gana No D $, M.R.R. ■ 1908 

Foreman — Track Laving 


Man 


Time 


Rate 


Performance 


Pav 


























































































































































































































































































































Total 


„ 




Total 







Fig. 1. Time-Keeper's Slip. 
Duplicate record is made automatically on a similar slip by- 
carbon paper. 

distribution of cost. One advantage from the notebook is that much 
of the distribution is made in the field, with a corresponding reduc- 
tion of office work. 

Punch=Cards. The keeping of time by means of punch-cards has 
been tried with considerable success on many jobs, but only recently 



COST-ANALYSIS ENGINEERING 15 

has it been reduced to a practical basis for use on large construction 
work. 

The Construction Service Company of New York City has devel- 
oped a system of time and cost keeping, using the duplicate punch- 
card almost entirely. Several of these cards are reproduced in con- 
nection with this text. 

As a general thing, the punching of the cards is done by foremen 
of the gang, or by someone who has the performance of the gang under 
direct observation. The cards show not only the time worked by 
each man upon any one day, but just as exactly the time worked upon 
any job by all the men. A duplicate of the record is made automati- 
cally, to be kept in the time-keeper's office, the other going to head- 
quarters for permanent record. 

The record thus obtained is absolutely exact, especially as to dis- 
tribution ; but the system has some of the same objections that the note- 
book has. For instance, unless the cards are kept by the foreman him- 
self, whoever punches them may inadvertently miss a man. This, 
however, is hot so liable to happen as when a notebook is used. When- 
ever a single punch appears opposite a man's number, it is apparent 
that all his time must be accounted for in some way or other; while, 
with a notebook, it may be that, having been missed once, no record 
of any time will appear. 

There is absolutely no opportunity for a time-keeper or for a 
foreman to "fudge" his account in any way, for a punch mark once 
made in the card cannot be erased or destroyed in any way. The 
record stands. 

Time=Keeper's Cards. Instead of the time-keeper keeping his 
records in a notebook, as has been described, he may be provided with 
slips of tough paper of such size and shape as will readily go into his 
pocket, or will fit in a filing cabinet. 

The modus operandi of these cards or slips is as follows : 

Each card or slip is devoted to but one gang and one ledger ac- 
count — such, for example, as placing ties in railroad work, gang No. G. 
It will show the foreman's name; the name or number, or both, of 
each man; and the amount of time that he spent on this particular 
class of work. The sum of the amounts for the gang on this classifi- 
cation, will be the cost for this gang and this account for the day in 
question. 



16 



COST-ANALYSIS ENGINEERING 



If a man has been working at more than one piece of work on that 
day, the time-keeper makes the apportionment of time on the spot; 
and the portion of his time that he has spent placing ties is put on the 
"Placing Ties" card or slip. The remainder of his time is placed on 
another slip corresponding to the other ledger account. If the time- 
keeper is uncertain as to which ledger account the work belongs to, 
he writes a description of the work at the top of the card or slip. A 
convenient form for a slip is illustrated in Fig. 1 ; and a convenient form 
for a file card, in Fig. 2. 

It is frequently of advantage to have time-cards show, in addition 
to their pay and work performed, a log of the conditions, such as tern- 



ana No D&M.RR. 1908 
Foreman Track Lav i na 


Man 


Time, 


Rate 




Pay 


































































































Total 




Total Performance. 


Total 






' o 



Fig. 2. Time-Keeper's Card. 
Duplicate record is made automatically on similar card by carbon paper. 

perature and weather; the causes and duration of each delay; the gen- 
eral conditions on the work; the kind, condition, and the make of tools, 
machinery, etc. ; and any further details that may be important. How 
this can be done on the various cards illustrated in this volume, can be 
seen from a study of the illustrations. 

Written Time=Cards have the advantage of the minimum of depar- 
ture from existing methods; the disadvantages that arise are slight; 
and it is difficult to so arrange the cards as to obtain duplicates. A 
foreman with a dirty thumb will make a paper sheet on which he writes 
in the field look as if it had been dragged through the mud ; while, with 
a punch, he can bring his card in with comparatively small damage. 
In general, it may be said that for the time-keeper's use the written 



COST-ANALYSIS ENGINEERING 17 

card has a slight advantage over the punch-card ; while the reverse is 
the case for records to be obtained by the foreman, or whenever the 
men, such as drillers or teamsters, hold their own cards. 

Foreman's Report. When the making-up of the pay-roll and the 
distribution of cost depend upon the reports of foremen, many serious 
difficulties are introduced into the work. Most foremen are intelli- 
gent enough to make a satisfactory report, and even more of them are 
honest enough to make a correct report. It is a curious fact, how- 
ever, that among men of this class, while they would use every care in 
accounting for money entrusted to them, there is no tendency to con- 
sider time in the same light; and in consequence the reports of time 
given are liable to be very lax. 

Moreover, if a foreman felt so inclined, if there were no one check- 
ing him or his reports, it would be a very simple matter for him to 
"fudge" his accounts so as to be able to acquire considerable graft. 

If the foreman is intelligent and conscientious, a report and a 
distribution can be obtained from him which would be very easy to' 
work into an excellent office record. Unfortunately, the desired com- 
bination seldom obtains, and there are very few large works carried 
on with such a system of time-keeping. 

Cost Distribution. The time having been taken in the field, it 
now becomes necessary to make a distribution of costs in the office. 
The cost is that which is paid for producing work, being the material 
and labor cost of production, added to the proper proportions of ex- 
pense cost, the expense being incurred in carrying on the operation 
and so making the actual work a possibility. The distribution of the 
cost is necessary in order that the contractor may see whether or not 
any particular operation is profitable; and a detailed analysis of the 
distribution, such as will be given later, will indicate in what respect 
the work may be made cheaper and more profitable. 

In all cost distribution, there are certain items which cause 
trouble; and their proper disposition has led to much discussion among 
authorities on them, and has been the source of many different ar- 
rangements for their proper apportioning to the various operations 
on the work. For instance, there is the time of such men as are en- 
gaged upon water-supply service, drainage systems, the blacksmith, 
machinists, electricians, water boy, the time of watchmen, police, etc., 
which may come under the heading of "general labor;" and there are 



18 COST-ANALYSIS ENGINEERING 

such items as the transportation and distribution of coal to various 
parts of the work, the transportation and handling of stores, and num- 
erous other items which, while seemingly affecting the whole work, 
are directly chargeable to some particular operation. 

In many instances of distribution, the item of General Expenses, 
which includes the expense of store-keeper, time-keeper, bookkeepers, 
clerks, and such office force as may be required, is rather difficult of 
disposition. Those items which are usually monthly, may be distrib- 
uted daily at a rate per day found by dividing the monthly rate by the 
number of days in the month, or they may be lumped at the end of the 
month and apportioned to the various operations. If they are dis- 
tributed from day to day, it is rather difficult to tell just what propor- 
tion of them should go to each operation, as the cost of any operation 
is liable to vary greatly from day to day. If they are left to the end of 
the month, it is impossible to tell from day to day the exact cost of the 
work. 

Overhead Expenses are another source of difficulty. Under this 
heading can be placed all salaries which do not ordinarily appear upon 
the pay-roll, such as the salary of the General Manager of the work, the 
Chief Engineer, and the officers of the company, and such expenses as 
office rent, telephone, office furniture, stationery, etc. Just where 
General Expenses leave off, and Overhead Expenses begin, is rather 
hard to determine, the line of demarcation varying in almost all cases. 

One of the greatest troubles in distribution is caused by over- 
time of men who are on a daily and monthly basis. Under the same 
head might be placed Lost Foreman's Time — that is, the time which 
the monthly and daily men are paid for, and which produces no output. 

TIME=KEEPER'S NOTEBOOK 

A page from a time-keeper's notebook is reproduced in Fig. 3. 
The necessity for an explanation of such a record is apparent. The 
work on which this record was made, was a job of rock excavation on 
which two steam shovels were being used, and the time and output of 
each shovel were kept separately. The record was made on the 17th 
of the month. 

At the left of the page, within the curved line under the heading 
u sh. 2," we have the names of the shovel crew and the numbers of the 
pit men. At the side of these names and numbers, is the record of the 



COST-ANALYSIS ENGINEERING 



19 



performance of the shovel of the day previous, the 16th, the shovel 
runner having given it to the time-keeper while the latter was on his 
first round on the 17th. Just below the record of the shovel, there are 
four numbers under a heading Ditch. In order to drain the shovel pit, 
it was necessary to use four men for cutting a ditch, and the time of 
thesemen is charged 
to the shovel. Un- 
derneath the record 
for the No. 2 shovel, 
the record of 



is 

shovel No. 1. It is 
recorded in exactly 
the same way as the 
other record. 

In the center of 
the page, at the top, 
is the record of the 
drill gang for each 
shovel. There were 
six drills working in 
gang No. 2; but the 
record does not 
show this clearly, as 
there are two 
columns of six num- 
bers each, one 
column being the 
driller's numbers, 
and the other being 
those of the drill 
helpers. Then there 
is a column of four 
numbers represent- 
ing the muckers. 



■/o7 y 







Fig. 3. Page from a Time-Keeper's Notebook. 



The time-keeper knows, of course, which is which; but if for any reason 
anyone else than himself had to use the notes in the office, they would 
be useless. The number under the line is that of the man who 
carries bits to and from the blacksmith. The name of the fireman 



20 COST-ANALYSIS ENGINEERING 



of the boiler which furnishes steam to the drills is given, and the 
number of his helper. 

The record of gang No. 1 is given in the same garbled manner, 
there being 5 drillers, 5 helpers, and 4 muckers in the gang, besides 
the man carrying bits, the fireman (whose name is given), and his 
helper. It will be noticed that in neither gang is the name or num- 
ber of the foreman given, the time-keeper reiving upon his memory 
to make the record complete in the office. 

In the upper right-hand corner of the page, is the record of the 
blasting gang, in front of shovel No. 1. There are 5 men, including the 
foreman, whose number is given first. Within the ring is shown 
the number of pounds of powder used on the previous day as reported 
by the foreman. The record reads "on the 16th, 150 pounds of 30 % 
powder, and 750 pounds of 40 %." 

Directly below this, midway down the page, is the record of the 
men working on dump No. 1. The foreman's number heads the list, 
the numbers of his men following. 

Just to the right of the shovel records, and below the record for 
drill gang No. 2, is the heading "ng. tr. f 1 ;" and the men whose 
numbers are under this heading are engaged in laying and repairing 
the narrow-gauge track for the dump trains from shovel No. 1. Just 
below the middle of the page, is a list of names and numbers utterly 
unintelligible to anyone but the one who made it. The facts are 
these: Donovan is the man who looked after the storage of pow- 
der; within the bracket, Nick (the time-keeper, not knowing the 
last name, used his number, as well as the part of the name that he 
knows) is the blacksmith; and No. 72 is his helper; No. 118 helped 
the blacksmith for two hours, having been taken from the narrow- 
gauge track gang. The time-keeper had to depend entirely upon the 
blacksmith telling him this, or his record would have been incom- 
plete. The next three men whose names appear in this column were 
engaged upon repairing a 6-inch pipe line; and the next two pairs 
within brackets, marked No. 2 and No. 1, are the pipe-fitters for 
the drill gangs and shovels No. 2 and No. 1 respectively. 

DISTRIBUTION FROM TIMEKEEPER'S NOTEBOOK 

The time-keeper, having taken his notes over the entire job, sends 
them to the office so that the time may be posted for each man, and 
the distribution made. 



COST-ANALYSIS ENGINEERING 21 

The time-keeper goes over his notes, and picks out the items that 
are chargeable to drilling. In gang No. 2, there are 6 drillers at 30 cents 
per hour; 6 helpers, 4 muckers, 1 man carrying bits, and one fireman's 
helper, all at 17 cents, and one fireman at 25 cents. From the note at 
the bottom of the page, he knows (although no one else would) that 
Lear at 20 cents and No. 278 at 17 cents, were also with this gang. 
This, with the foreman at $3.50 per day, figures to $29.08. These 
are the charges that go directly to drilling, being the cost of time of 
the men actually engaged upon that operation and nothing else. But 
besides this, there must be apportioned to this cost a certain part of the 
Superintendent's salary, a portion of the labor on the 6-inch water 
pipe and the whole water system, a portion of the time of the black- 
smith, the watchman, the storekeeper, the time-keeper, clerks, the 
water boy, and numerous other items. 

In exactly the same way, the cost of the operation of the steam 
shovels is figured. For instance, No. 2 has an engineer at $125, a 
cranesman at $100, and a fireman at $75, a month, and 6 pitmen at 
20 cents per hour, making the total charge of crew $19.27. To this 
the time-keeper added $5.44 as the cost of digging the ditch that 
drains the shovel pit. To charge this whole amount against the 
shovel for that day, is manifestly unjust, as the work of draining 
through this ditch will continue for many days, always facilitating 
the work of the shovel. The cost of subsequent days' work is less- 
ened, while the cost of this particular day, as given with the $5.44 
charge against it, is entirely too high. The spreading of an item of 
this kind is an extremely difficult matter, but it must be done. The 
steam-shovel cost must also have its proportional share of the charge 
for Superintendent, water system, blacksmith, etc. 

The charge for narrow-gauge track is $14.86, being the time of 
one foreman at 20 cents, and 9 men for 8 hours and one man for 6 hours 
at 17 cents. The charge against No. 1 dump is $8.40, being the time 
for one foreman at 20 cents, and 5 men for 8 hours at 17 cents. The 
cost of blasting is figured exactly the same way, and the 900 pounds of 
powder used entered in the material account charged against the work 
in front of shovel No. 1. 

The headings for the distribution of steam-shovel work, aside 
from Drilling and Blasting, would be Shovel crew, Pit crew, Dump creic, 
Laying shovel track, Train crew, and Laying narrow-gange track, all 



22 COST-ANALYSIS ENGINEERING 



of which in the end can be summarized under Loading and Trans- 
porting, and the unit-cost of moving a yard of material figured from 
this summary. 

PUNCH=CARDS 

The manner in which the time-keeper takes his notes in a note- 
book has been shown, and the impracticability of many of its phases 
pointed out. Two punch-cards for use on such work as that mentioned 
— namely, rock excavation with steam shovels and dump trains — are 
shown in Figs. 4 and 5. They are the Steam-Shovel Card and the 
Train Record. The shovel card is kept by the shovel runner or the fire- 
man, and the train record is kept by the dinkey runner. Each keeps 
his own record separately; and, at the end of the day's work, the 
records must check each other, 

The steam-shovel card shows the date, the number of cars loaded 
per hour, and the total number loaded per day. It also shows the time 
of starting and stopping the shovel for any reason, the stops for moving 
up being indicated in a different way from other stops; and thus a 
record of moves is kept automatically. The time of the shovel crew 
and the exact number of hours worked by the pit crew, are also shown, 
together with the cubic feet of coal consumed by the shovel. The 
causes of delays and the condition of the shovel are written in the 
blank spaces under their proper heading at the bottom of the card; 
but with this exception, the entire record is made with the use of an 
ordinary conductor's punch. 

The train card shows the number of trips made by a train each 
day, the time of leaving the shovel on any trip being shown to the near- 
est 5 minutes. The number of cars hauled by all the trains during any 
hour must check with the number of cars loaded, as shown on the 
shovel card. The train card, besides showing the date, shows the total 
number of cars hauled (the total of all cards must check the total cars 
as shown by the steam-shovel record), the cubic feet of coal consumed, 
the average yardage per car, the haul in stations of 100 feet, the number 
of the dinkey engine, and a report of its condition, whether it be good, 
fair, or bad. This card is signed with the dinkey runner's name. 

It will be seen that the record is very much more complete than 
that taken by the time-keeper, and is more reliable as to methods, being 
made while the work is going on; and the greater part of it is checked 
by having two records made separately, instead of taking a verbal 



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COST-ANALYSIS ENGINEERING 2.5 

report from the shovel runner the following day as in the example pre- 
viously shown. 

Neither the train record nor shovel card, however, show any dis- 
tribution of time, but are really performance records. The pipe and 
steamfitter's card reproduced in Fig. 6 gives an excellent example of 
how the time is taken and the distribution automatically made all at 
one time. . 

The classifications of labor are : Shovel, Channeler, Drills, Dinkey, 
and Trains, Pump, Tank, General Water System, and Blacksmith, 
being lettered, it will be noticed, from A to H at the head of the column. 
Each card provides space for the record of the foreman and 14 
men. These eight classifications will probably cover all the work 
that the pipe and steamfitters are called upon to do; but if not, there 
are two extra lines on which can be written any classifications out of 
the ordinary. 

There will be certain men assigned to certain regular work, as in 
the case previously quoted under the head of the Time-Keeper's Note- 
book, where there were two pipemen for each drill outfit. If these men 
spend their entire day of eight hours doing nothing but looking after 
the water supply for the drills, a punch mark would be made above the 
number of each of them on the card and opposite the figure 8, which 
represents the hours worked. To the left of the eight, and in the same 
line, and also in the vertical column opposite the word Drills, another 
punch mark will be made. Again, opposite the letter C, which is the 
key for the classification of drills, and in the column assigned to each 
man, and below his name, another punch mark will be made. This 
gives the workman full time, showing that he worked eight hours on 
drill water supply and nothing else. Suppose the foreman worked 
three hours on the general water system, three hours on the pumping 
station, and two hours directing the repair of the water tank. There 
would then be on the record a punch mark in his column opposite 3, 6, 
and 8; at the left of 3 in the column headed G, another punch will 
appear; at the left of 6 in the column E, another punch will be found, 
and still another at the left of 8 in the column F. In the column under 
the foreman's name, punch marks would be made opposite E, F, and 
G, showing that he worked on these three classifications. 

In the same way, the time and occupation of each man under this 
foreman can be indicated, no matter how many changes he may make 























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COST-ANALYSIS ENGINEERING 27 

in his work during the day. The time, however, is recorded only to 
the nearest hour. 

Provision is made in the lower left-hand corner, for the punching 
of the date; and along the lower edge is the place for the recording of 
the number of hours used in thawing the pipes, etc., and in providing 
protection for them. This latter record was found necessary, because 
the work on which these cards were used was done in an extremely 
cold locality and continued throughout the entire year. 

When the records are made in the field and are sent in to the 
office to be transferred • to permanent records, it is not necessary for 
the man who made the record to be at hand to interpret his notes, as 
there is absolutely no opportunity given him to allow his note taking 
to vary in the least from day to day, the record being absolutely auto- 
matic. 

PROCESS COST SUBDIVISION 

While the object of the regular distribution of cost is the obtain- 
ing of unit-costs, there is another cost analysis which may be called a 
refinement of the cost-keeping system, and which, if properly used, 
can bring about a marked reduction in all costs. While this will be 
discussed more fully in the chapter upon Reduction of Cost, it is a form 
of time-keeping, and so will be touched upon here. On more or less 
rough construction work, it seems rather absurd to attempt to reduce 
the various processes of any operation to such a fineness that they 
may be timed to minutes and even to seconds. Conditions vary so 
greatly, the character of the work being done changes so much from 
time to time, and the personnel of the organization is sometimes 
shifted so much, that it seems impossible to reduce performance to any 
satisfactory basis which may be used as a standard. Nevertheless, 
without attempting to reach such a basis, careful watching and timing 
of the different parts of the work will result in much better perform- 
ance and increased profits, as can be clearly shown. 

Take, for instance, a driller working with a steam drill in fairly 
even rock, with no marked obstacles in his way and with very little 
mucking to do. Notice the exact time at which his tripod is in place 
and the drill ready to work. The driller places his bit in the drill, 
turns on the steam, and the drill starts. Note the time of starting the 
drill; note the time when the drill stops, the bit having gone down its 
full length; and do the same witli each subsequent bit, noting care- 



28 COST-ANALYSIS ENGINEERING 

fully the exact time consumed in changing. When the last bit is 
down its full length and the hole is finished, note the time required to 
take out the bit, move the weights, loosen the tripod, and make every- 
thing ready for the moving. Then note just how many men are 
required to move the drill, and just how long it takes them to do it; 
and finally, how long it takes the driller to get his drill again in work- 
ing order and started. 

It will be found that a large majority of drillers take entirely too 
much time in the changing of bits, and that almost invariably there 
are too many men helping to move a drill, and that they take too long 
for it. Another source of delay is preparing the drill for work after it 
has been moved. It is perhaps just as well to take plenty of time for 
this, in order to get the drill properly set and adjusted before starting 
it; but the loss of time between the adjustment and the starting may be 
said to be about the same as that lost in changing bits, if not a little 
more. 

When the driller takes too long in changing bits, it is largely his 
own fault, and he should be watched more carefully by the foreman, 
and, if necessary, instructed. If time is wasted in the moving of the 
drill, it is the fault of the foreman alone. By a careful timing and 
balancing of the various processes in drilling, the most competent men 
can easily be picked out. 

In the case of concreting, the minutes lost in the handling of a 
batch of material from the stock pile to its final position as concrete, 
often amount to a great deal. Suppose on a small job a half-yard 
mixer is being used, and it averages for 8 hours 30 batches per hour, 
or 120 yards per day If it is possible to reduce the time of each 
batch 15 seconds, the output of the plant will be increased over 14 
per cent; or, figured on a basis of 120 yards, there will be an increase 
of 17 yards, which — at, say, $5.00 per yard — would mean a handsome 
increase in the daily profits. And still, 15 seconds seems to be al- 
most too trivial a matter for which to spend time and perhaps a little 
extra money in the way of time-keeping. 

Starting with the unmixed material in the stock pile, notice how 
long it takes the men to load their wheelbarrows with sand and stone; 
then the time that the material remains in the wheelbarrow, both at 
the beginning and stopping end of the trip to the mixer; and also the 
time in transit. If the material is dumped into measuring boxes, note 




O £ 

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COST-ANALYSIS ENGINEERING 29 

the time that it remains in the boxes. If it is dumped directly from 
the wheelbarrows into the mixer, it is necessary to take the time of 
mixing from when the first wheelbarrow was dumped until the batch 
is dumped. The mixer may be said to be the governor of the whole 
operation; for the men handling unmixed material can handle it no 
faster than the mixer takes it, and the men handling the mixed con- 
crete can get it no faster than the mixer furnishes it to them. For 
this reason the observation of the operation of the mixer should be 
made with special care. It is not our intention to tell how, or to give 
advice concerning the mixing of concrete; but it is desired to show 
how, if any time is to be saved, it will be through the saving of sec- 
onds in each operation. 

If the mixed concrete is to be dumped as a batch into the hopper 
or hoist, the question of time saving is much simpler than if portions 
of the batch have to be dumped into wheelbarrows. If, however, it 
is necessary to dump into wheelbarrows, a basis for the time necessary 
to empty the mixer can be found only by careful timing and noting 
the action of the men during the timing. 

The time between the filling and the emptying of the wheelbarrow 
of concrete, will of course vary greatly according to the haul ; but here 
again, careful timing and observation will soon establish a basis from 
which the most economical manner of distributing the concrete can 
be made; and exactly the same thing is true of the return of the empty 
barrels. 

All of this may seem to be a digression from the subject of cost 
getting; but in fact it is merely a discussion of a very refined form of 
cost getting, and a branch of the subject which has perhaps been given 
too little attention. When the daily output of a job is up to or above 
the average, everything looks bright, and no one who is responsible 
feels overburdened with care. If, however the output falls too low, 
some glaring cause is at once sought, and the fall of output blamed 
to some unforeseen circumstance or accident. This is all very well, 
as accidents affecting output cannot be entirely avoided, and unfore- 
seen conditions will make great differences in performance; but the 
careful analysis of process cost subdivision will bring about results 
that will astonish those "practical men" who think that they have got 
their unit-costs down to the lowest point simply because their output 



30 COST-ANALYSTS ENGINEERING 



is generally large and everyone on the work seems to be working to his 
top notch. 

OUTPUT 

The reason for compiling the data for which the time-keeper is 
responsible, is that, from the analysis of the distribution made, the 
contractor is able to tell what work is being done with profit; and, if 
any particular operation shows loss, the analysis will help more than 
anything else to discover the reason for the loss. In figuring his profit 
on any work, the contractor must figure on a unit-cost basis, exactly 
the same as he figures when he prepares his bid. In order to do this, 
he must have an exact measurement of output. In many classes of 
work, this measurement is extremely simple; but in others no little 
ingenuity is required to devise a scheme which will give the informa- 
tion wanted exactly and without requiring much work. 

The payment for work is based upon the engineer's estimate. 
The monthly estimate is usually more or less a guess, made simply for 
the purpose of paying the contractor approximately according to what 
he has done. The monthly estimate is generally a pretty fair approxi- 
mation of the exact amount of work done; and the final estimate covers 
everything included in the contract that has not already been taken 
care of. 

The contractor's measurements of work done each day should 
agree quite closely with the engineer's estimate; but, if the work is 
difficult to measure, the contractor has many times more opportunity 
of making errors in his measurement by going over it daily than the 
engineer has who only goes over it once. A careful consideration of 
the differences in the amount of estimates will sometimes show the con- 
tractor how his estimates can be made to balance with those of any par- 
ticular corps of engineers, and he can govern his daily measurement 
accordingly. 

There are few measurements in the field which can be reduced to 
a unit, or rather which can be counted directly. Linear measurements 
are easy enough to get; the measurement of area is a little more diffi- 
cult; while the measurements of volume, especially in rough work, are 
often extremely difficult to make in a satisfactory manner. Measure- 
ment by weight is often found to be of great advantage, if proper facil- 
ities can be arranged for weighing. 

The measurement of drill output is extremely simple. The holes 



COST-ANALYSIS ENGINEERING 31 

for any one day's work can be marked as they are finished, and, at the 
end of the day, all measured ; or they can be measured as finished, and 
their depth taken, and hence the entire day's work is easily deter- 
mined. This, of course, is a linear measurement; and in the same 
class would fall such work as laying track, ballasting, grading with a 
road machine, and the measurement of the work of track and wheel 
scrapers. 

The measurement of quantities whose units are areas is only a 
little more difficult. Paving, for instance, is very easily measured, 
the distance from curb to curb generally being constant, and so really 
reducing the measuring to a linear measurement — that is, the length 
of the section of pavement laid. Brick laying, while really a cubical 
measurement, is taken in the same way, the area of the face of the wall 
laid being taken, and multiplied by the standard number of bricks 
to any given thickness of wall. This really reduces the measurement 
for brick laying to a unit-basis, the unit being one brick. Painting and 
plastering are measured in the same way; and so also is roofing. On 
road work, plowing and sprinkling are estimated per unit-area ; and 
in quarry work, channeling is so estimated. 

The determination of volume on construction work is liable to 
be very difficult. Take, for instance, the output of a steam shovel 
cutting through rock. The walls of the cut will be very irregular both 
in line and in slope, no matter how skilfully the shovel is operated; 
and the face of the cut is liable to be even more irregular. No abso- 
lutely exact measurement can be made; and for this reason it is com- 
mon practice to estimate the contents of the cars rather than attempt 
to estimate the size of the pit excavation during any one day. Generally 
the size of the pit is roughly measured, and the yardage figured from 
this measurement. It is also figured from the number of cars loaded, 
and, if carefully done and the estimate of the volume of the cars loaded 
is correct, both figures should .balance at the end of the month with the 
monthly estimate, which, on account of the large volume measured, 
can practically ignore such irregularity as would affect the other two 
measurements. In earth excavation, the measurement is much sim- 
pler, because the pit is more regular and the cars can be fully loaded. 

There are natural working units that lend great simplicity to cal- 
culations of cost — such, for example, as a floor panel in a building, a 
column, a bridge panel, a pier of masonry, etc. 



32 COST-ANALYSIS ENGINEERING 

Another unit of measurement is often obtained through the per- 
centage of a total or of another unit, such as the amount of sand in a 
yard of concrete. Knowing the mix, a percentage of the total yardage 
of concrete will be the amount of sand that has been moved. 

Care should be taken properly to subdivide the units of measure- 
ment. The ordinary unit of concrete work is the cubic yard or the 
cubic foot. The mistake is frequently made, of estimating the cost of 
forms and of reinforcement only in terms of the cubic yards of con- 
crete. The cost of forms should be estimated also by the number of 
feet, board measure. Reinforcing steel should be estimated by the 
pound. 

One difficult kind of work to obtain costs on by the regular 
method, is the laying of cut stone. A very simple way to obtain this 
is to paint on each stone a number, and let the time-keeper get the 
dimensions of the stone after it has been cut, before it has been placed 
in the wall. Then the stone layer simply records the number of each 
stone as it is laid. 

A check on the measurement of the quantity of the work done is 
frequently obtained by the measurement of the quantity of the work 
left undone or of the material remaining in the stock piles. 

COST SHOWING 

The object of cost keeping is to furnish accurate and early infor- 
mation to those in authority, both as to where they stand financially 
on the work, and what necessities or opportunities there are for im- 
provement in economy. 

In order to accomplish the object of cost keeping, it is necessary 
that there be some efficient method of cost showing; and it is essential 
that the system of cost showing, in combination with the system of 
cost keeping, shall meet the following specifications: 

1. It shall be accurate. 

2. It shall be simple. 

3-. It shall be easy to study. 

4. It shall be easy to compile. 

5. It shall be capable of being compiled in a very short time after 
the receipt of the original figures. 

It needs no argument to prove that the cost-showing system should 
be accurate. If it be full of errors, its usefulness is entirely obviated; 
and 1 per cent of error in it will do a great deal more than 1 per cent 



COST-ANALYSIS ENGINEERING 33 

of damage to its efficiency, in assisting the manager to increase the 
efficiency of the work. There is, however, a limit to the desirable pre- 
cision of such an affair. The cost of putting in ties on a certain rail- 
road for a certain month, for instance, may have been 7.2143 cents. 
If the last two figures are interesting from the statistician's point of 
view, they are utterly useless to a practical manager. If the previous 
month's performance has been, we shall say, 6.94 cents per tie, this 
month's figures will have shown an increase in cost of 0.27 cent, which 
is approximately 3.9 per cent of the previous month's figure. In other 
words, the tie-placing efficiency has decreased 3.9 per cent. It is very 
questionable whether the figure 4 per cent, although not quite so pre- 
cise, would not be rather more useful to the manager than the figure 
3.9 per cent; and, personally, the authors would favor the briefer work. 
The degree of refinement to which these records should be carried, is, 
in the last analysis, a matter for the individual judgment of the man- 
ager himself. The student should bear in mind the .folly of unneces- 
sarily elaborate figures. 

The second specification, that the cost-showing system shall be 
simple, is almost as important as the first. If it be not simple, the 
chances for inaccuracy will be tremendously multiplied. It will take 
more work to carry it on ; and the straightening-out of errors and dis- 
crepancies will be so difficult, and will require so much of the time of 
persons in authority, as to leave them no opportunity to do their other 
work. Plainly, it should not be necessary for a manager to do a lot of 
detailed work on cost-keeping or cost-showing systems himself. 

Specifications Nos. 3 and 4 are more or less included in specifica- 
tion No. 2. Specification No. 5, however, is also of great importance. 
Information that is stale is about as useless as no information at all. 
If you tell a foreman on Monday that the work of his gang for the week 
ending ten days before was not up to the mark, he will not have much 
respect for your cost-keeping system ; he will certainly not remember 
sufficiently well the causes that produced his bad work, to remedy 
them; or he will be able to pick out of the haze of history enough 
excuses to let himself out of the responsibility of his bad work, and to 
put his manager at sea as to where this foreman and his gang really 
stand. It is therefore of prime importance that the arrangement, 
for showing the manager what his costs are, with the salient conditions 
affecting such costs, shall be so rapid as to be "red-hot" all the time. 



34 COST- ANALYSIS ENGINEERING 

The commonest arrangement of cost showing — and the only one 
ordinarily found at the present day on most contract work — is an 
abstract prepared on a piece of yellow paper by the time-keeper for the 
inspection of the manager each morning; and this has so few disadvan- 
tages that it would be very satisfactory, were it not that it is impossible 
from it to compare at a glance the work done, let us say yesterday, with 
that done previously. It is, however, far better than any other system 
which lacks any of the essentials indicated above. 
USE OF CHARTS 

The best method that nas so far been devised is by the use of 
charts showing to scale the different unit-costs for the various days in 
the month. Such charts are illustrated in Figs. 7 and 8. They are 
from the records of the Construction Service Company. One of 
these (Fig. 7) indicates the cost of channeling rock. It will be seen from 
the line A, that during this month the number of square feet chan- 
neled varied from 75 to 375, and that the labor cost varied from a max- 
imum of 62 cents to a minimum of 8 cents. On the 8th, the morning 
crew did not work, because, as it happened, of severe weather, which 
accounted for the low output on that day. On the 24th, the night 
shift allowed the pipes to freeze up. It may be mentioned that the 
foreman of the night shift, whose name appears in brackets on the 
chart, has since turned his attention to other fields of industry than 
channeling. On the 28th, the channeler had reached a point where 
the cut was frequently filled up by earth that slid in from the side and 
caused such- a large amount of sludge as to cushion the blows of the 
blade; and the chart shows on that day a high cost, due to the cleaning 
away of this earth. 

The chart illustrated in Fig. 8 is that for steam-shovel work on the 
same contract of the Construction Service Company. Line . 1 indicates 
the approximate number of yards moved per day. Line B shows the 
pay-roll, ranging from $165 to $310 per day, and including a percent- 
age for incidentals; while line C represents the values of the B quantity 
divided by the A quantity, and gives the unit-cost in labor per yard for 
excavating and moving rock. It will be noted that the Sundays are 
skipped. These came on the 5th, 12th, 19th, and 26th of the month. 
There were some men employed on each of these Sundays; but their 
time was so distributed over the rest of the month as not to show for 
the Sundavs, as the steam shovels did not work on that day. 







Number of Sq. 
Ft, Channeled 
Hundreds 






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COST-ANALYSIS ENGINEERING 37 



These charts are of a size to be filed in one of the standard loose- 
leaf books, and their range is from zero to about 12; thus it is possible 
to show any quantity to scale for any day in the month. This com- 
pany has not found it of advantage to plot more than 4 lines on any one 
chart. 

Charts such as these may be marked each morning by the 
time-keeper upon a tracing prepared for this purpose; and at the 
end of the month the lines connecting the points may be inked in, 
and the chart blue-printed and the blue-print filed in a convenient 
place for immediate reference. 

There are several ways of working out the unit-cost from the 
figures, such for example as : 

1. Performance per time unit 

2. Performance per dollar; 

3. Cost per unit of performance. 

The first of these is not, properly speaking, a cost statement, al- 
though it is a function of a cost statement and for certain purposes is 
more convenient. The number of feet of rock drilled per drill hour, 
is a very convenient form for record. 

When drilling under conditions of snow and ice, more muckers 
have to be employed than at other times. If the cost of mucking is 
included in the cost of drilling, as it frequently is, the true index of how 
well the drills are getting on is the number of feet per drill hour, rather 
than the cost of the operation to the contractor. 

The second method is the reciprocal of the third. Other systems 
will suggest themselves by virtue of the peculiar requirements of each 
case in practice. 

Checking by Charts. A great advantage of the chart system of 
cost showing, is that it acts as an automatic check upon the cost-keeping 
system in general. As indicated earlier in this volume, it occasionally 
happens that a punch-card is not turned in, or the time-keeper fails 
to get certain data. This is immediately discoverable by the gap on 
the chart, and thus the chart acts as a check on the cost-getting depart- 
ment. This will not entirely obviate the necessity for inspection to 
ascertain whether the time-cards are properly kept and the work is 
properly done. 

The showing of costs should be made daily for the men immedi- 
ately identified with the field work; they should be made weekly for 



38 COST-ANALYSIS ENGINEERING 

the general manager, and monthly for the home office. These month- 
ly office reports are sometimes valuable in the planning of the financial 
arrangements for the work. On a job involving, say, a pay-roll of 
$5,000 a week, with monthly estimates, early information as to per- 
formance over the month is of very great value. 

Showing the men certain charts and records will serve to increase 
their interest in their work, but this should not be overdone. It is as 
well that the men should not know the actual cost of their work to the 
contractor in dollars and cents. If, on the contract price, the con- 
tractor is making a handsome profit, the men want more money. If 
the contractor is not making a handsome profit, the men are apt to 
think that they are on a losing job, and become discouraged ace jrding- 
ly. The economy of the contractor's work should be private infor- 
mation, since it might do him considerable damage by becoming 
known to competing contractors. The charts showing the per- 
formance per unit of time, however, are not subject to the restrictions 
above mentioned. 

COST KEEPING 

In the foregoing there has been nothing that is a part of the 
regular bookkeeping, with the exception that part of the time-keeper's 
records are necessary to the bookkeeper. It should be appreciated at 
the start, that the bookkeeper's work is of great importance, that it 
cannot be superseded by a cost-keeping system, and that it should not 
be divided up with the cost-keeping system. The scoffers at cost 
analysis are inclined to take the ground that a bookkeeper, a cost- 
keeper, a cost-analysis engineer, are more or less clumsy substitutes 
for managerial intelligence; and they point to the proposition that in 
the last analysis it should be easy to let the office boy run the job with 
a textbook at one elbow and a calculating machine at the other. 

It is insisted upon at the start, that cost keeping is as important 
as bookkeeping, but that it has an entirely different function; and in 
applying cost keeping to construction work, it is very important that a 
distinct line of demarcation be drawn between the two branches. 

Another error that is frequently made by antiquarian students, 
men who are studying old methods of engineering and construction 
rather than those of to-day, is that a cost-keeping system is assumed 
to be complete by the man who runs it, when he knows how many 
feet of hole his drillers are able to average per hour, per day, or per 



COST-ANALYSIS ENGINEERING 39 

week. The cost analyst will point to the fact that in the literature of 
the subject many false statements are made as to the costs of certain 
items of work, and will show that no allowance has been made for 
depreciation, repairs, etc., not to say profit, interest on the contractor's 
money, and a host of other things. The student is warned that a 
proper cost-keeping system must of necessity take into consideration 
all the items of cost on the job; and, further, it should take them into 
account with such detail that it will be a real, living help to a man in 
estimating future costs on similar work. 

Now, as a general thing, the essential similarity of items has been 
lost sight of when these items are parts of work which is not generally 
dissimilar. For example, the item of earthwork in the construction 
of a large dam may be very similar in its essential cost to, and may 
be of the greatest use in assisting a contractor or engineer to figure the 
cost of, earthwork under similar climatic conditions on a railroad 
embankment; yet those who are most interested in the subject are 
inclined to classify dams as an entirely different sort of structure from 
railroads. The designing of a dam is a different matter from the 
design of a railroad ; but to build one will often involve the same kind 
of tools, the same kind of machinery, the same kind of men, the same 
kind of "horse sense," and the same general principles of construction, 
as to build the other. Therefore, if his costs are properly subdivided 
and intelligently kept on one kind of construction, the contractor or 
engineer will be materially aided, not only in estimating the cost of the 
work upon the other, but in being in close touch with his work after 
he has started. 

Every construction organization ought to have a schedule of 
standard items which may be called ledger accounts; and its books 
ought to be kept in such a manner that the records of the total and of 
the unit-amounts for these items on past work and on current work 
may be immediately available for the benefit of its officers. No two 
contractors will have the same arrangement for distributing cost; no 
two will have the same items for the accounts; but there are certain 
fundamental items that will come into use on almost every large 
piece of work, and some of them have a peculiar significance, and 
should be treated with special care. 

Estimates on Ledger Items. In making estimates it is important 
to have this list in sight, in order that important items may not be 



40 COST-AXALYSIS ENGINEERING 

omitted. Such a list, which will cover a large portion of the ordinary 
charges, is here given : 

1. Gang Labor: 

(a) Hourly rate; 

(b) Monthly rate. 

The men who work by the month are apt to have to spend a good 
deal of non-productive time, on account of weather conditions, etc.; 
while the men who are on an hourly basis, as a general thing, do some 
profitable work whenever they are paid. It is feasible to figure a 
good deal more closely on the cost of work for those men who have 
practically no lost time to be taken care of, as emergencies or inci- 
dentals. It will be noted, also, that the cost and the time of hourly 
and daily men can be figured and charted day by day; whereas it is 
impossible to know exactly what the charges will be for labor that is 
paid by the month, until the end of the month. In order to make 
report charts showing cost as completely as possible, it is a frequent 
practice to add a certain percentage to the cost of the known items, to 
cover the so-called lost foremen's time; and to make at the end of the 
month a correction of a greater or less size, in order to make the cost- 
keeping end tally with the bookkeeping end of the work. 

2. General Labor, etc. This item will comprise the labor 
of the men who have something to do with more than a few parts of 
the work. A watchman's time is not spent in drilling, or on a steam 
shovel while it is running. Nevertheless a proportionate part of his 
salary should be divided among the different branches of the work. 
Sometimes this will be a very small item, sometimes a large item. 
For example, if a steam shovel is excavating 30,000 yards of material 
per month, the watchman's unit-charge to excavation may be very 
small; but if the shovel is tied up for nearly the whole month, the 
charge per unit for watchman's time may be alarmingly high. This 
is one reason why unit-cost and total cost should always go together. 
A blacksmith's time, part of which is spent in sharpening drills, need 
not be all chargeable to drilling, because he may spend a good deal of 
time in repairing the steam shovel or fixing hand tools, etc. 

3. Overhead Labor. Clerks, bookkeepers, messengers, office 
force, and General Manager are ordinarily included amon<>- the items of 
overhead charge, as well as salaries of general officers. 

4. Overhead Materials. In this classification, there are 



COST-ANALYSIS ENGINEERING 41 

included stationery, office furniture, supplies, etc. When the office 
furniture is disposed of upon the completion of the work, its value 
should be credited upon this item. 

5. Overhead Incidentals. These may include various items, 
such as telephone, office rent, telegraph messages, express charges on 
incidentals not directly connected with plant, etc. 

6. Preparatory Costs. These include the cost of getting 
ready to do the work, and, depending upon the nature of the job, may 
include any or all of the following items: 

(a) Temporary roads; 

(b) Temporary trestles; 

(c) Clearing and grubbing; 

(d) Snow removal and drainage; 

(e) Traveling expenses to job; 

(/) Preliminary estimates, calculations, and surveys; 

(g) Freight and handling of materials to and from job; 

(h) Freight on preliminary supplies; 

( i ) Handling of preliminary supplies; 

(/) Licenses and premiums on bonds, etc. 

(k) Legal expenses; 

( I ) Loss on initial operations; 

(m) Right of way and cost of site; 

(n) Sheds, storehouses, and other temporary buildings; 

( o ) Tools, less final value. 

7. Supplies. These are chargeable F. O. B. the job, or at 
the railroad station nearest to the work. They include all supplies 
for carrying on the work, as distinct from material, including explo- 
sives, coal, oil, waste, etc., and may include a charge for water. 

8. Interest and Depreciation on Plant. This item is 
variously estimated by different people, and may vary greatly. It is 
impossible to establish an absolute rule; but on the average con- 
tractor's plant, it may be stated that y 1 ^ of 1 per cent per working day 
is a very fair general average figure. The average steam shovel, for 
example, will work perhaps 200 days, under favorable weather con- 
ditions; and on this basis the interest and depreciation charge will be 
20 per cent per year, and is not far from a fair figure. Some con- 
tractors allow 33 per cent per year on such material as road machinery, 
including crushers, steam rollers, etc. This is a little high, provided 
that a reasonable charge is made for repairs. 

0. Repairs to Plant. How much money it takes to keep the 
equipment in proper condition for performing efficient work, is a 



42 COST-ANALYSIS ENGINEERING 



question on which the limits of space prevent a detailed discussion. 
On such a machine as a standard-gauge steam locomotive in constant 
operation to the limit of its capacity, repairs may run as high as 20 
per cent per year; and on a rock drill the repairs may be 50 per cent 
or more per year. 

10. Rent, Stumpage, etc. The item of rent includes the 
rental of ground and the storage buildings, if any, outside of the office 
expenses. Stumpage is the cost of standing timber, the purchaser 
being privileged to leave the stump after cutting down the tree. 

1 1 . Materials of Construction. These are chargeable F. O. 
B. the job, or at the railroad station nearest to the work. 

12. Handling of Supplies. 

13. Freight, when not included in item No. 11 or No. 7. 

14. Unloading, Hauling and Storing Materials and 
Supplies. 

15. Re-handling Materials and Supplies. 

16. Interest on Cash Capital Exclusive of Plant. 

17. Taxes and Insurance on Property (including boilers). 

18. Accidental Insurance, to protect workmen and the public. 

19. Advertising, Medical Expense, and Charity. 

20. Discounts on Bonds, Warrants, or Notes. . 

21. Contingency Labor. 

22. Contingency Materials. 

23. Contingency Supplies. 

24. Cost of Finding and Recovering Lost Freight and 
Supplies. 

25. Profit. 

COST REDUCTION 

The ultimate aim of cost analysis is economic efficiency; and 
any system or method of cost analysis which does not result in the 
lessening of the total cost per unit of work performed, must neces- 
sarily be a failure. 

After the costs on work have been partially analyzed, it becomes 
the province of the engineer to introduce methods and devices whereby 
the expense of obtaining the various data may be more than offset in 
the general economy of the work. It was long ago realized that shop 
practice could be economized by methods of systematization ; and 
we have an early instance of the appreciation of this fact in the story 



COST-ANALYSIS ENGINEERING 43 

4 _ 

of the struggles and methods resorted to by James Watt in the con- 
struction of the early steam engines. The troubles arising from in- 
competent workmen, drunkenness, and the necessity of doing work 
in different parts of the country far removed from headquarters, were 
as real then as they are now, with this disadvantage, that in the 
eighteenth century the press, the telephone, and the professional 
schools had not reached a development admitting of intelligent co- 
operation in the attack upon this problem. 

Within the last score of years it has been found that cost-analysis 
applied to shop work problems gives most amazing results. When 
the piece-work system was introduced, it was believed that the final 
solution of the problem had been attained. The men were then 
placed upon the footing of contractors. A man got so much pay for 
accomplishing so much work; and it was most clearly to his interest 
to accomplish the maximum of work in order to get the maximum of 
pay. It was immediately evident that the good men would soon show 
such a contrast to the poor men on the work as to inspire a constant 
rivalry, thereby resulting in a very much higher output. In order 
that the desire to accomplish more work should not interfere with the 
quality of the work, all materials were systematically and rigidly 
inspected. 

For a good many years the piece-work system flourished, and it 
is still flourishing as compared with its predecessors. It is vigorously 
fought by trades unions and by the less able among the men. It is 
tolerated by those of mediocre ability, and it is heartily endorsed by 
the most skilful. In order to remove the resistance of labor unions, a 
modification of the piece-rate system, known as the bonus system, 
has been devised. It will be described in a subsequent paragraph. 

Remarkable development has been achieved in the shop by the 
most brilliant work on the part of the men who have applied cost 
analysis, favored by the fact that in the shop one has conditions of 
work which are practically invariable from day to day. It is possible, 
then, to compare the work done per unit of time in the morning, with 
the work done per unit of time in the afternoon, or for each hour in the 
day, and thus to determine the effect of fatigue of the operators upon 
their efficiency and the effect of such specific influences as the character 
of artificial light, the grade of steel in tools, and even the economic 
value of providing reading rooms, white-enameled lavatories, and 



44 COST-ANALYSIS ENGINEERING 

recreation for the operatives. To cost analysis has been largely due 
the development of the special high-speed steels and' an amazing 
number of improvements in machinery, entirely aside from the 
stimulus and education of the workmen. 

In field work, however, comparatively little has been accom- 
plished in the world at large along these lines, not because the oppor- 
tunity is lacking, bui because certain of the difficulties appeal more glar- 
ingly to the pioneer in the field, and offer some peculiar discourage- 
ments. The conditions are not uniform from day to day. The 
locus of the work is changing, the weather is variable, and a very 
large number of external agencies will be continually interfering with 
the scheduled regularity of the work. The method or process where- 
by a piece of work can be done more economically, may be instituted 
at just the time when some apparently trivial variation of the weather, 
or breakdown in a water system, or interruption in train service, may 
produce an entirely opposite effect which will more than nullify the 
advantages obtained from the improved process or method, and will 
sometimes cover a period of a good many days and possibly weeks, 
making it appear that the improved method is not only a failure but 
a dragon in disguise. 

Field work is constantly presenting obstacles and difficulties 
which have to be met and fought, calling for emergency judgment 
on the part of the men in charge and on the part of all the men on the 
work to a greater or less extent; and here alone is one of the chief 
reasons why a contractor comes to depend almost exclusively upon 
the personality of his superintendent or foreman, to the exclusion of 
systematic analysis. 

It is abundantly demonstrable that when results are properly 
charted, and when a careful record is kept of the causes of interruption 
and the extent of the accidental obstacles, the problem becomes much 
simplified. It is astonishing how intimately a manager may come 
into touch in a short time with the obstacles to his work,. and with 
the most efficient methods for their removal, by means of proper 
reports and cost analysis, and especially by the intelligent use of 
charts. 

Ef verts of Weather. The principal obstruction to economical 
construction work in the temperate zone, is due to rain. If it is 
raining at about the time when the men come upon the work, they will 



COST-ANALYSIS ENGINEERING 45 

rarely fail to retire to their homes or to some point so far from the 
scene of operations as to make it difficult if not impossible to get them 
back upon the job if the weather should clear. 

If a rain comes on in the noon hour, they generally leave and do 
not return to work. If it should start to drizzle in the middle of the 
afternoon, and the men are under fairly good discipline, they stand a 
very good chance to stay the day out rather than miss getting a full 
day's pay. 

Next to rain as an obstacle is freezing weather. On concrete 
work, if the concrete is laid at temperatures below 22 degrees, and 
particularly when a slow-setting brand of cement is used, special pre- 
cautions have to be taken, and even then the work is liable to be 
rejected. For work in which steam engines are employed, as dinkeys, 
steam shovels, steam drills, etc., continued cold weather is likely to 
result in the freezing of supply pipes, the freezing of valves, and the 
breaking of pipe connections, necessitating a good deal of frost pro- 
tection and a well-disciplined and well-handled gang of pipe-fitters 
under a responsible foreman charged with the express duty of keeping 
the water lines clear. In very cold weather — say below zero — the 
freezing of water will seriously interfere with the economy of the work 
on the water end alone. Where steam drills are used and the weather 
is exceedingly cold, the steam from the drills blown upon the men 
condenses and freezes upon their clothes, involving great inconvenience 
and suffering. Under such conditions the men will not work so many 
hours per day as otherwise, and frequently they will not work at all at 
critical times in the progress of the work, to the great detriment of 
economy. 

It has been observed that a combination of stress of weather a 
few hours before the coming of the paymaster seems to be more dis- 
couraging than at any other time, and it is seized upon as an excuse 
to quit work. 

In very windy weather, more coal is burned than at other times; 
and sometimes a boiler which is capable of running seven or eight 
drills in ordinary weather will not be able to furnish steam for more 
than 70 or 80 per cent of this amount in the high, cold winds. 

For the above reasons it is essential to keep a record of the tem- 
perature and weather. 

Accidental Conditions. Besides the weather, there are a host of 



46 COST-ANALYSIS ENGINEERING 

accidental conditions that may arise to influence the economy of the 
work and complicate a precise study of the performance. Some of 
these, named at random, are: 

1. The blowing-out of the gasket in a main water supply pump. 

2. A shipment of poor coal. 

3. The wrecking of a trestle. 

4. A derailment of cars. 

5. The breaking of machinery on a shovel. 

G. The burning-out of a boiler, due to carelessness on the part of a 
watchman over night. 

7. The non-arrival of necessary and important material. 

8. Irregular blasting, due to irregular spacing of drill holes, or to 
bad loading, or to poor detonators or a poor exploding machine, or to irreg- 
ularity in the character of the rock itself. 

9. Erratic action on the part of one or more of the men, due to drunk- 
enness, ill-temper, or general contrariness. 

10. Errors on the part of foremen in co-operation, some of which are 
not detected in time to be eliminated. 

In working out any special problem, care should be taken that 

such accidental causes affecting performance — whether they decrease 

the performance or, as may happen, increase it — should be carefully 

noted and be a part of the regular report on the work. These features 

of a report ordinarily are ignored as being unimportant, but they are 

of the utmost value to the success of the work. 

STIMULATING THE MEN 

The art of persuading a man who is turning out 500,000 foot- 
pounds of work in ten hours, to turn out 800,000 foot-pounds of work 
in ten hours with a trivial increase in pay, is on its face difficult; but 
is by no means impossible, and a list of some of the ordinary means 
of doing this should not be out of place here. 

1. Watching the Work. If , on the average work under the obser- 
vation of a foreman whom they know, the men are made to realize 
that their individual performance is being watched and recorded by 
someone who is above and beyond their own foreman, there will 
usually result an increase in performance of from 10 to 20 per cent 
per man ; and particularly if a tab is kept upon the performance of the 
gang as a whole, the foreman will add his own stimulus to that applied 
by the men themselves, resulting in highly inceased efficiency. 

On such work as teaming, where teams are hauling earth along 
a road for a considerable distance, a punch-card is very valuable. 



COST-AXALYSIS ENGINEERING 47 

The driver knows that the time of his trip is being recorded and com- 
pared with the time for the same work done by other drivers; and it 
has the effect of concentrating his mind upon his performance, which 
in itself causes him to use more care in cutting down delays and keep- 
ing his team up to their work. 

In the operation of drilling, most valuable results have been 
achieved by giving each drill runner a card on which, at the com- 
pletion of each hole, the time of the finishing of the hole is punched ; 
and also the time of starting the new hole, in the same way. This 
card will then show the length of time that it took to drill the hole, and 
the length of time required to move his drill. He will be stimulated to 
move quickly, which in soft rock is an exceedingly important element 
of the drilling work, and he will be stimulated in the effort to get his 
holes down rapidly. 

Where earth or rock is being loaded by steam shovels and hauled 
by dinkey trains, great economy can be arrived at by providing each 
dinkey runner with a punch-card or a. report card on which he in- 
dicates the time when his train left the shovel and when it returned 
again to the shovel. This card then indicates the time for a round 
trip, and his mind is constantly being stimulated to look out for causes 
of delay; and, if he is at all conscientious, as most men are, he will 
instinctively attempt to make the best time. Some remarkable 
results have been achieved by this means alone in recent work. 

When concrete is being mixed by hand, if a record is made of 
the time when each batch is finished, there will inevitably be an 
increase of activity of all the men in the mixing gang. 

2. Discharges. The principle of natural selection of the men 
can be very advantageously applied. Where the supply of labor is 
adequate, it is advisable to make a rule of discharging a few of the 
poorest men every few days, taking on new men to fill their places. 
This necessarily results in an increase of the ability of the average 
men on the work, and it gives a healthy spur to the men who are not 
discharged. In carrying this method out, it should be done judi- 
ciously and with care to avoid discharging good men, lest the dis- 
cipline of the work be interfered with. Any man who is not willing 
to do his best, or who is caught loafing deliberately, is an economic 
disadvantage to the work, and should be allowed to go. Likewise, 
any man who with good intentions is so dull as to hinder the progress 



48 COST-ANALYSIS ENGINEERING 



of the work, should not be retained because of his good intentions 
alone. 

3. Bonus Systems. An immense advantage can be counted 
upon by the employment of a bonus system, of which there are a 
good many; and it should be said at the start, that a bonus system 
may, although it probably will not, be opposed by labor unions. The 
general idea of a bonus system is to place the men upon a contract 
footing whereby they will be guaranteed a minimum wage, and more 
money than the minimum if they perform unusually good work. A 
refinement of this system may be applied where the men receive less 
than the guaranteed minimum if their work is noticeably poor. Where 
this latter arrangement should be. applied, will depend largely upon 
the local conditions; and this feature is the one that is peculiarly 
obnoxious to the labor unions. Where the supply of labor is adequate, 
it is usually better to discharge the inefficient men than to attempt to 
work them under a depressed rate. 

On a recent piece of work, the steam drills, of which there were 14, 
were averaging 4 feet of hole drilled per drill hour, the drillers were 
getting 30 cents per drill hour, and helpers 18 J cents. For a period of 
ten days the drills were kept under the personal supervision and 
instruction of the expert in charge; and at the end of that time a bonus 
of 2 cents per foot for everything above 70 feet in 8 hours was offered 
to the men. On this basis no one could get a bonus unless he did 
100 per cent better than the average previously attained. Exceedingly 
cold weather intervened, preventing a good deal of drilling; but 
within two weeks of the return to normal weather conditions, the 
average drill output rose to over 6 feet per drill hour, and one man 
obtained the remarkable record of 142 feet in 9 hours, or over 15.7 feet 
per drill hour. On this work a careful record was kept day by day, 
of the performance of each man; and the men who had a consistently 
low average were gradually discharged, thereby helping out the bonus 
system. The men were also under more or less constant instruction, 
and therefore the improvement was not entirely due to the bonus 
system. 

A further modification of the bonus system is advisable in some 
cases, where an extra bonus is given for exceedingly high performance, 
such, for example, as paying the men an extra cent bonus, making 3 
cents above, say, 90 or 100 feet per 8 hours. It is well, however, to 



COST-ANALYSIS ENGINEERING 49 



apply this modified arrangement only after there has been an elimina- 
tion of the poorest men. When possible, the payment of bonuses 
should be made at very short intervals, and not left to a monthly set- 
tlement. 

4. Bulletin Board Posting. Posting upon a bulletin board 
in the storehouse or office, of the records of performance accom- 
plished in different parts of the work day by day or week by week, 
is a very valuable adjunct to the other methods of stimulation. The 
methods above indicated will keep the men on the qui vive during 
the day. A very valuable improvement can be instituted if the 
more intelligent among them can be led to think about their 
work after working hours. This must necessarily be done in rather 
a subtle way. Posting records at the end of the day's work so that the 
men see them on their way home, will do a great deal toward keeping 
the subject alive until the next morning. When the men have been 
led to a state where they discuss with each other the methods of 
improved efficiency, for the following day amazing results can be 
counted upon. 

5. Gang and Team Work. If a certain number of men have 
been working together under one foreman on one particular piece of 
work, they come to know each other's methods and their foreman's 
methods intimately; and they necessarily will become very much more 
efficient than when they are shifted from gang to gang or when they 
have to work under different foremen. If the record of the performance 
of each individual gang can be obtained, and the men, as well as the 
foreman, are acquainted with the record, a spirit of rivalry between 
the gangs can be developed which will add greatly to efficiency. In 
making such a record, inasmuch as the gangs are likely to vary in size, 
it is necessary to have a unit of performance that will be independent 
of the number of men in the gang. It will be found that, shortly 
after the application of this principle, the men are themselves making 
suggestions as to improvements in method ; and frequently their sug- 
gestions are immensely valuable. 

6. High Pay. Some contractors have found it economical to 
pay a little more than the prevailing rate of Wages, thereby attracting 
to their organization the best of the labor available. As a general 
thing, a man is perfectly willing to do 10 per cent more work for 5 per 
cent more pay per hour; and the difference in men is so great as to 



50 COST-ANALYSIS ENGINEERING 

make it more than well worth while to secure the very best of the 
labor obtainable. 

7. Prompt Pay. Men will work very much more contentedly 
when they can count upon their pay with promptness and regularity. 
There is nothing that demoralizes a piece of construction work more 
than the postponement of a pay-day. Special care should be taken 
that each man's pay is accurate. A man will seldom be overpaid 
unless there is "graft" on the job, but it sometimes happens that 
through errors on the part of the time-keeper or bookkeeper a man's 
pay is short, much to the agony of the man himself. 

8. Early Hours. A good deal of money is lost by the men not 
starting to work promptly at the commencing hour, and by quitting 
before the final hour. On a recent piece of work that had to be dras- 
tically reorganized, an entire blasting gang rested on their shovels for 
over one hour, because their foreman had decided to quit without 
notice, and the man who was supposed to be in charge of the work 
arrived late himself, and was detained at the other end of the job. 
On this particular piece of work, it was not the habit to blow a whistle 
at the commencing or the quitting hour, and the men started work in 
the morning and quit work in the evening according to their own time- 
pieces. It was noted that nobody on the whole job quit a minute after 
he should have quit, or started a moment earlier than he was paid to 
start. 

In factory work it is feasible to have all the men go through a gate 
which is closed one minute after the hour and not opened again for 
perhaps 25 minutes, so that, if a man is two minutes late, he loses a 
half-hour's pay. This has the merit of not working injustice to any- 
one, and, after being instituted, seems to be accepted by the men with 
a reasonable degree of contentment. It is not easy to start a strike 
because some men lose their jobs from being late. 

Such a system as this, however, is practically impossible on out- 
side contract work; and while it may be feasible to institute a modi- 
fication of the time clock method, it is not known that this has yet 
been successfully done. Probably the most satisfactory way of insur- 
ing prompt arrival of the men, is to measure the output of each gang 
and make each foreman responsible for it, thus giving him a personal 
incentive to get his men on the job promptly. 

9. Enough Foremen. It is necessary, in any organization, 



COST-ANALYSIS ENGINEERING 51 

to have the chain of responsibility lead through a sufficient number of 
foremen; otherwise a superintendent or supervisor will find himself 
"spreading out too thin," and will be attempting to perform a lot of 
work that should be done by a foreman. One superintendent can 
supervise the work of 20 or 30 foremen with a favorable layout, and 
each foreman can supervise the work of from 10 to 25 men. If, how- 
ever, there be more gangs than there are foremen, the superintendent 
will find himself trying to play the part of foreman in instructing the 
men, and not able to do his own work, which is to instruct and super- 
vise the foremen. In the matter of drilling, a number of able mana- 
gers are not in favor of having a foreman over the drills. It is calcu- 
lated that by substituting a boy to keep the records of the drilling, and 
putting bonuses on the drills, the difference between the pay of a fore- 
man and the pay of a boy is saved, with no appreciable loss in per- 
formance. 

There are strong grounds for the opinion that there should be no 
process, such as drilling, without a foreman, where the work is on a 
large scale. When 10 drills are working, they will employ altogether 
20 men on the drills, a number of muckers clearing the ground, and 
a pipe man. The work of these men cannot fail to be improved by 
their being at all times under the watchful eye of a man to whom they 
are responsible for the quantity and quality of their work. Aside from 
this, if the foreman is an expert driller, the instruction that he can 
give to the less able of the drill runners will be worth ten times its cost. 

The same argument applies to all processes in the field. 

10. Education on the Work. As a general thing, men who take 
money for their labor are more than willing to deliver a square deal to 
their employer; and it will almost invariably be found that the more 
familiar a man is with the difficulties and possibilities of his fellow- 
workmen, the more efficient he will be himself. For this reason it has 
been found highly satisfactory, in some lines of work, to change the 
men around on the job. In a certain concrete building 12 stories high, 
the upper stories were built in a small fraction of the time required 
for the corresponding lower stories. The greater part of the extraordi- 
nary increase in efficiency was attributed to the fact that the men were 
so educated that a man at the top of the building knew how the men 
at the mixer and in other parts of the job were doing their work, and 
knew that the superintendent in charge was measuring the speed of 



52 COST-ANALYSIS ENGINEERING 

the deliveries from the hoist. The disadvantage of this method is 
that it takes a long time to work up the efficiency. It is, however, an 
admirable method for disciplining an organization. 

Discipline. To the practical man, or to the intelligent student, 
there seems to be no necessity for arguing in favor of discipline as an 
essential to economical field work ; but so large a percentage of contract 
work in the field is badly disciplined, and the general principles seem 
to be unknown to so many field organizations, that a brief statement 
of them appears to be called for in this volume. 

By discipline is meant the cultivation of a spirit of: 

1. Co-operation; 

2. Obedience; 

3. Responsibility; 

4. Personal loyalty. 

The subject will be discussed on the basis of reorganization oj 
work, because here the chief difficulties are met. 

The three types of organization that are most clearly defined in 
the way of discipline, are those of a military nature, railroad work, 
and factory work. 

On construction work, it is not feasible to introduce a military 
form of discipline. In the first place, the penalties of the military sen- 
ice are not permissible; and in the second place it is not usually practi- 
cable to have so thorough a system of distribution of responsibility; 
while in the third place the same men are not here together for a long 
enough period to make military discipline practicable. 

In railroad work a man is usually employed for a long term of 
years, on rather small pay, with a large chance of promotion. From 
the day of his initiation on the work, he is impressed profoundly with 
the necessity of protecting lives and of keeping trains moving all the 
time; and, in a short time, he comes to the frame of mind in which his 
pay, his personal convenience, and his personal prejudice are subordi- 
nate interests. The initials of the superintendent on a little slip of 
paper are sufficient to make him do almost anything within the limit 
of endurance; and, as a general thing, he does it ungrudgingly (but 
not uncomplainingly), and with a cheerfulness that is in many respects 
astonishing. 

Such a degree of discipline is entirely feasible on any contract 
work of long duration, and it should be obtained if economy is desired. 



COST-ANALYSIS ENGINEERING 53 

It is not possible to institute successfully radical reforms and methods, 
without first securing good discipline on the work; and when work is 
badly disorganized, the discipline should be the first point of attack. 

It is necessary to have, first, a system of locating responsibility. 
If a dinkey becomes derailed, if the spacing of drill holes be errone- 
ously made, if a steam shovel be out of line, if the wrong methods of 
loading be pursued, if a pump be out of order, if necessary material 
or supplies be wanting, if the pipes freeze up, if, in short, one hundred 
and one little things happen that cause confusion on the work, it 
should be possible to find someone wdio, by some crime of omission or 
commission, is responsible for the trouble, and who can be made, in 
some degree at least, to bear the brunt of it. The only man who 
seems destined to be entirely free from the consequence of his mistakes, 
is the clerk of the Weather Bureau. 

The organization should be laid out from the bottom upward, 
rather than from the top downward. The laborer is responsible prac- 
tically for carrying out the instructions of his foreman to the satisfac- 
tion of his foreman and of no one else, and for this reason he should not 
work under the impression that anyone except his own foreman is 
likely to discharge him, to criticise him, or to praise him. If his fore- 
man be the right sort of man, the laborer, with his dozen associates, 
will have at heart, besides the interests of the work, a strong feeling of 
personal loyalty to the foreman; and this feeling will be reciprocated 
by the foreman. If a foreman be noticed vigorously complaining 
that the men he has to deal with are inefficient, incompetent, and a 
disgrace to civilization compared to the men he had to work with some 
years before, he may as a general thing be put down as a "blow-hard" 
and of little value to the organization. The most successful are 
usually the ones who are ordinarily quiet, cool under emergency, and 
yet of sufficient determination to inspire among the men a wholesome 
respect for them. A man who loses his temper on the work for any rea- 
son, does not, as a general thing, make a good foreman or superin- 
tendent. 

The relations obtaining between the -men and their foreman, 
should obtain to a more marked degree between the foreman and their 
superintendent. Briefly stated, every man on the job should have 
to look for orders from one man and only one man ; and he should be 
responsible to that man for the satisfactory performance of those orders. 



54 COST-ANALYSIS ENGINEERING 

Conflicting orders can be avoided only by systematic compliance 
with the rule just above outlined. 

It sometimes happens after periods of financial depression, or as 
a result of special conditions, that it is feasible to reduce the pay of a 
good many men on the work. This should always be done with great 
care and after an intimate knowledge has been obtained of the per- 
sonalities of the men affected. As a general thing, if you cut down a 
man's pay 10 per cent, you will cut down the work 20 per cent, at least 
for a time; and it frequently happens that after such a pay reduction, 
small, petty depredations on the work are committed. Articles get 
stolen; machinery is damaged by "sore heads." It is usually unwise 
to reduce the pay of a few men. As a general policy, where a small 
percentage of the working force is to be affected, it is better to dis- 
charge a few men outright, and endeavor by economic methods to 
increase the output of the others. 

Differential pay is a prolific source of trouble, and it is very com- 
mon. By this is meant the payment to different men of different rates 
for the performance of the same work. The men who obtain the less 
pay think that their pay ought to be raised ; and the man who gets the 
most pay can in no probability appreciate the fact that he may be 
over-paid. Rather than cut his pay down, it is well, if possible, to 
put him at some other class of work. 

It is often necessary for economical reasons to place men who 
have been paid by the month, upon an hourly basis; and even when 
by this they average rather more than they formerly received, it usually 
causes discontent. Any man likes to know how he is coming out at 
the end of the month regardless of the weather, and it is an additional 
source of anxiety to him not to know what his pay envelope will con- 
tain. When he keeps his own record of the hours worked, he is likely 
to disagree with the time- keeper, and this can lead to a good deal of 
disaffection and dissatisfaction. 

A frequent cause of disaffection on work is due to the habit too 
often indulged in by time-keepers, of gossiping with the men. The 
time-keeper and the storekeeper necessarily come into contact with a 
very large percentage of the men every day; and if the time-keeper 
particularly be disposed to gossip, he has abundant opportunity to 
gratify his desire, and can produce a great deal of trouble. For this 
reason the general character of the time-keeper should be carefully 



COST-ANALYSIS ENGINEERING 55 

scrutinized before employing him; and he should be cautious, when 
making his rounds, to confine himself strictly to business. If the men 
on the job know as much about the work as the General Manager, if 
they know all the ins and outs and ups and downs of the contract, 
they necessarily discuss it among themselves, and a great deal of rest- 
lessness is produced, which is very difficult to stamp out, because, by 
the time it has reached a pronounced stage, the men have learned so 
much about the politics, as it were, of the job, as to interfere with the 
discipline. 

If there be dissensions at headquarters, if the parties that control 
the work are at war, and if the methods and performance of the mana- 
ger or superintendent be not absolutely satisfactory to every one of the 
officials, nothing can be worse than to let a suspicion of this matter 
get around among the men. How a general manager or superin- 
tendent can prevent this, if an officer be disposed to talk, is a problem 
that no attempt will here be made to solve. In reorganization, such a 
condition is one for which the manager should be continually on the 
alert, and he is advised to be suspicious of the time-keeper and store- 
keeper. 

Labor=Saving Devices Involving Plant. If the men are in a rea- 
sonably good state of discipline, it is feasible to make changes in the 
layout involving special apparatus or plant; and in deciding upon such 
measures, a question arises as to how much money it is justifiable to 
spend for a new plant. A piece of work under reorganization is ordi- 
narily a piece of work that is more or less in financial difficulties, and 
the purchase of plant for the economizing of the work is usually looked 
upon by the officers as a dangerous move. Particularly is this the case 
when any changes of this kind turn out to be unsuccessful. A small 
amount of money wasted on special apparatus is always in sight — at 
the scrap heap, if nowhere else — whereas a good deal of money wasted 
in fruitless labor can be easily lost to view. 

If the amount of saving on a certain operation by the installation 
of special material be sufficient to pay for this material in a few weeks, 
the purchase of the material can be immediately justified, and the cost 
of the apparatus can be charged as current expenses to be shortly 
recovered in the economy of the work. Where expensive and heavy 
machinery is to be installed, however, the matter should be gone into 
with the greatest care and detail. 



56 COST-ANALYSIS ENGINEERING 

A few of the articles which come within the class chargeable to 
current expenses, are: 

1. The use of water jets for increasing the speed of drilling in soft 
rock. 

2. The use of hickory wands for stirring up sludge in drill holes, and 
increasing the speed of drilling. 

3. The use of special explosives and good exploding machines, and of 
loading tubes for blasting. 

4. Small grading machines for spreading earth and macadam. 

5. Special wheelbarrows or carts for moving material. 

6. Special small tools for the blacksmith, including a trough in which 
he can set his bits to be hardened, with the points in the water. 

7. A sufficient supply of picks and shovels. 

Some of the items of plant that may be classed in the other cate- 
gory, are: 

1. Special wagons and scrapers for hauling earth. 

2. Concrete mixers especially adapted to the work in hand. 

3. Derricks. 

4. Locomotive cranes. 

5. Cableways. 

6. Bit-sharpening machines. 

Labor=Saving Devices Involving No Plant. Where the labor 
preparatory to introducing the improved methods is considered, it 
should be taken as equivalent to a plant charge as affecting the 
interest of the contractor. If, for example, it has been the practice 
to drill and blast immediately in front of a steam shovel on rock exca- 
vation, and it is desired to have the drilling and blasting so far ahead 
of the shovel as to avoid the occasional necessity of -holding up the 
shovel, the money involved in the work done ahead should be consid- 
ered in the nature of a temporary investment and charged to money 
expended on plant which will not come back for a period of perhaps 
one month. 

A steam-shovel crew has a good deal more pride in its work, and 
will continue working under more disagreeable weather conditions, 
than a drilling gang; and when drilling in front of a shovel, severe 
weather conditions may cause the drilling work to stop without inter- 
rupting the operation of the shovel. If, then, the drills are working 
too close to the shovel, the shovel may catch them. 

On the other hand, it is unwise to blast far ahead of the shovel, 
for a number of reasons. In the first place, there is no advantage in 
investing money in drill holes, except to avoid such a contingency as 




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COST-ANALYSIS ENGINEERING 57 

outlined above. In the second place, it is impossible to tell how effect- 
ive the blasting has been until the shovel has attacked the broken rock; 
and if the blasting is done far ahead of the shovel, poor blasting may go 
undetected until an immense amount of financial damage has been 
done. 

To cite a specific instance — On a recent piece of important work, 
a cut several hundred feet long was drilled to a depth of supposedly 
fourteen feet, and blasted with more or less unsatisfactory results. 
The steam shovel was then put in, and excavated to a depth of five or 
six feet. The subsequent cut of from eight to nine feet deep had to 
be entirely re-drilled and re-blasted. The drilling in the already 
partly broken rock was immensely difficult, the drills sticking a great 
deal and a good many of the holes having to be abandoned ; while the 
blasting was unsatisfactory because of the fissures. 

The rapid reorganization of work can be furthered by the issuance 
of special instructions to foremen in the field. This practice has been 
admirably followed by Frank B. Gilbreth, and is described in his 
"Field System." As illustrations of such orders, are the following 
to drill and blasting foremen, issued on some recent work: 

INSTRUCTIONS TO FOREMEN 

Rules for Drilling — 

Drill foremen are requested to do their utmost to enforce the fol- 
lowing rules for drilling: 

1. Each drill at the beginning of a hole is to be supplied with a 
complete set of sharp bits and a pump, which will be laid alongside of the 
drill tripod by the drill tender, under the directions of the foreman. 

2. As soon as a hole is finished, one of the muckers at the direc- 
tion of the foreman will assist the two drill runners to move the tripod; 
and the mucker under the direction of the foreman will then pump out 
the hole that has just been completed. 

3. The foreman will then personally, with a wooden rod, measure 
the depth of the hole, and punch said depth on the drillers' card, the mucker 
placing a well-made round plug in the hole and hammering it home. 

4. Foremen will see that the drills are so distributed as to keep them 
as near as possible to the manifold, from which the steam supply is taken. 

5. Pipe connections are to be made by a pipe-fitter who will be as- 
signed to each drill gang, and who may be assisted by the foreman and by 
a mucker when necessary. No pipe-fitting is to be done by drill runners 
or helpers unless absolutely necessary. 

6. The time for drilling is from 8 a. m. until noon, and from 12.30 until 
4.30 p. m.; and the moving of the dinkey supplying the drills with steam 
is never to be done within those hours, unless absolutely necessary, and 



58 COST-ANALYSIS ENGINEERING 

when it is necessary, a note to that effect must be made on the quarry- 
card. 

7. Whenever for any reason the drills are out of steam, the drill fore- 
man will indicate the time when the steam pressure failed and the time 
when pressure was again turned on, with a reason why the pressure gave out. 
This to be written on the quarry card. 

8. Foremen will see that each drill is in proper working order, and 
supplied with an exhaust pipe of the proper length and with a throttle. 
Whenever for any reason a drill is not in perfect condition, the foreman wilJ 
immediately report it and make requisition through the storekeeper for 
the necessary parts and repairs. 

The attention of all concerned is particularly called to these rules, the 
enforcement of which is essential to the economic performance of the work; 
and all concerned are particularly urged to make a most earnest effort to 
see that, as far as it is possible, every drill on the work shall be in actual 
operation for 8 hours on every working day. 

By order of, 

Richard T. Dana, General Manager. 

INSTRUCTIONS TO FOREMEN 

Rules for the Guidance of Blasting Foremen — 

Blasting foremen are requested to do their utmost to enforce the fol- 
lowing rules for the conduct of blasting operations: 

1. Attention is called to the fact that dynamite will freeze in about 
45° temperature, and that at this temperature, a little above or a little 
below, dynamite is exceedingly sensitive to shocks, and should be handled 
accordingly. 

2. Whenever a part of the charge in a hole has been exploded, leaving 
any unexploded dynamite in the hole, do not under any circumstances 
blow out the unexploded dynamite with a steam jet. You may, however, 
put a stick of dynamite down into the hole on top of the unexploded pow- 
der and endeavor to fire the entire hole in this manner. 

3. The blasting foreman will provide himself with a measured wooden 
rod for tamping, and personally see that every hole that is loaded is down 
to grade. If he should find any hole that is not down to grade, he will 
immediately report the fact to the superintendent or assistant superintendent 
on the work, and make a note of the same on his time-card. 

4. The attention of the foreman is called to the fact that dynamite 
is not as efficient in a hole full of water as it is in a dry hole, and every 
effort should be made to load the holes as dry as possible. 

5. The tamping of the holes should be of the heaviest and stickiest 
clay that can be obtained, and this tamping should extend the entire length 
of the hole above the powder. 

6. Never thaw dynamite in front of the fire, or on a hot stone re- 
moved from a fire, or by piling sticks in a boiler or in an oven. 

By order of, 

Richard T. Dana, General Manager. 

In hauling earth, the principal elements of team expense are the 
time to haul and the standing still to load. This last item can be very 



COST-ANALYSIS ENGINEERING 59 

materially reduced by the simple expedient of having on the work an 
extra wagon or two. A team can be changed from one wagon to an- 
other in about one and a-half minutes, and the same number of teams 
on a short haul will do easily 15 per cent more work by this trick. 

The same principle applies to the mixing of concrete involving 
extra wheelbarrows; and here it may be mentioned that the arrange- 
ment of the concrete platform is seldom economical. The men, if 
left to themselves, will usually not have sufficient runways, so that a 
man with a loaded wheelbarrow will be painfully struggling up a plank, 
while a man with an empty wheelbarrow is waiting for him to get out 
of the way. Much can be accomplished by having the men move in 
procession so that no man with a wheelbarrow will ever have to stand 
and wait for another man to get out of his way. Of course the ideal 
method of handling concrete into a mixer is to do it from bins with 
chutes; but the great majority of this class of work is not done in this 
manner. 

On contract work, the emergency charges for the moving of plant 
are usually considerably higher, than they ought to be, owing to the fact 
that the work is done by men who are not especially skilful in this kind 
of work. The direction of these processes should be given to a man 
who is especially good at it; and the work should be provided with a 
good supply of gin poles, snatch blocks, tackle, etc. 

If a piece of work has been under personal observation for con- 
siderable time, a great many sources of improvement in the perform- 
ance can be detected that are entirely invisible upon casual inspec- 
tion; and the student of economics is urged to devote a large amount of 
time to the most careful and complete study of minor and apparently 
trivial operations. Too much respect is usually given to established 
methods, just because they are established methods; and the analysis 
of a process that is apparently simple and of minor importance, but 
which is repeated scores of times in a day, is nearly always given too 
little importance as compared with the process that is elaborate and 
complicated, and which may in itself be of great importance, but which, 
on the particular work at hand, is dependent upon apparently minor 
processes. To illustrate — A shovel, loading eight or nine thousand 
yards of rock per month, was inspected ; and the first impression 
obtained was that the reason the shovel output was so small was be- 
cause of the inefficient lavout of the shovel work itself. It was found. 



60 COST-ANALYSIS ENGINEERING 

however, that the shovel was actually able to work a good deal faster 
than the drills and the blasting could provide broken rock for it ; and 
the ultimate solution of the problem was found in the reorganizing of 
the drilling, in order to do more work with the same number of drills, 
and in the use of improved methods in blasting. The handling of the 
shovel took care of itself as soon as the other problems were solved. 

The cost of spreading broken macadam on a road, to the average 
contractor, is not far from 12 cents per cubic yard; and the work is 
done with shovels and forks. This method is one that has been pur- 
sued for a great many years; and there are very few contractors who 
realize that it is exceedingly expensive. Some contractors, however, 
are doing work of this kind with the aid of a road machine that requires 
for its operation two or three men and four horses. A small grader 
machine that can be operated by one man and two horses for rough 
spreading, assisted by one man on the ground with a potato hook, 
has been known to do this work for about 2 cents or less per cubic yard. 

In bridge-erecting work, a great deal of money can be saved over 
ordinary methods by the designing of, special tools, such as dolly bars; 
and a good system of keeping detailed cost on such work will be sure to 
result advantageously. Much labor is lost in the erecting of roof 
trusses and in the erection of trusses in general, by crude and old- 
fashioned methods. The pneumatic riveter which strikes a great 
many light blows per minute has revolutionized field riveting; but the 
use of such a machine for cutting rivets has been unsuccessful in com- 
petition with hand labor on at least one large piece of work in Xew 
York City. 

In painting, considerable time is ordinarily lost by the painters 
in preparing their own staging. Whenever possible, these prepara- 
tions should be done for them under the direction of a skilled man; 
and the use of small winches on the staging whereby the painters can 
quickly raise and lower themselves, has been found of great value. 

On contract work, the blacksmith is in a position peculiar to him- 
self. He is classed as an expert, paid by the month, and is supposed 
somehow to get all the work done that comes to him. He has general 
charge of his department, and he gets very few orders and practically 
no instruction from the superintendent or manager. He is nearly 
always an interesting personality, and, outside of a very limited field, 
extraordinarily ignorant. The excuse on a great deal of uneconomical 



COST-ANALYSIS ENGINEERING 61 



work is that it is impossible to get a competent blacksmith who knows 
how to do the work that he is called upon to perform. Tools will not 
hold their edge, or they break. Upon the matter being referred to the 
blacksmith, he will usually come back with a complaint about his coal, 
or the grade of steel with which he is supplied, or his tempering solu- 
tion, or the condition of his forge. He should be provided with a thor- 
oughly good set of tools, and the superintendent should know that his 
tools are of the best. He should next be carefully and thoroughly 
instructed as to how to harden and temper steel. A convenient shop 
for the blacksmith, and proper methods of forging and tempering, will 
add incalculable value to the organization. 

Introduction of New Methods. It should be adopted as a car- 
dinal principle, that there are no methods in the field which are not cap- 
able of improvement along the line of economy; and it should be re- 
membered that a very small improvement in any one method is 
invariably worth a great deal of thought and time in arriving at it. 
The systernatic perusal of the proceedings of the engineering societies 
and the engineering press, will result in the suggestion of new and 
improved methods and of a good many bad and unimproved meth- 
ods; and the trained expert should be able to sift the wheat from the 
chaff, and apply only such as will fit his special needs. 

The literature of shop development and shop economics is rich 
in illustrations and suggestions that can be adapted to field work, and 
should be gone over very carefully for this purpose. In this con- 
nection it should be urged that it is a duty of a professional man to 
publish new methods. There is no room for argument on the propo- 
sition that the principle of free trade, showing the other fellow two 
blades of grass growing where one grew before, is an advantage to all 
concerned. 

Design of New Methods. When there is crying need for improved 
methods in the field on account of special necessity, it behooves the 
man in charge to invent improved methods and design improved 
apparatus. The cardinal elements of such design include the 
following: 

1. Simplicity. 

2. Low first cost, so that if the experiment is not successful, nothing 
will be lost. 

3. The use of standard sizes of material. 

4. Generality of application. 



62 COST-ANALYSIS ENGINEERING 

Whenever possible, a new method or a new machine should be 
so constructed as to apply to as large a proportion of the whole 
work as possible, and every effort should be made toward the stand- 
ardization of materials and apparatus. 

In attempting work in blasting, it should be remembered that the 
use of new and untried explosives is attended with peculiar dangers. 
The men are familiar with the use of the standard grades of powder; 
and while they are ignorant of how dangerous it is to take liberties 
with dynamite, they are at a great disadvantage when a new explosive 
is given to them for trial. If it looks like dynamite and is exploded 
with the ordinary detonating cap. its peculiarities do not receive 
much attention. 

Men in the field are instinctively opposed to new ideas, and it 
will invariably be found that new methods meet with stubborn opposi- 
tion. A foreman to whom a new method is suggested will not expect 
it to be successful, particularly if he has ever heard it condemned; 
and it always seems as if the thought were father to the wish, for, when 
ordered to try it in the field, if he can make it fail, he will do so with 
unerring accuracy. As a general thing, however, when it is success- 
fully demonstrated, he will become a loyal supporter of it. In pre- 
senting a new method to a foreman or superintendent, it is well not 
to encourage the raising of objections. It is better to let the objections 
raise themselves in the application of the process; and a man who has 
not gone on record as saying that in his opinion a new scheme 
is no good, is a much more loyal supporter of the new scheme 
than when he has committed himself against it. 

One of the difficulties in improving the efficiency of work, is 
the extraordinarily ingenious line of excuses that the men will present 
for not getting their work done properly. Of these, perhaps the most 
hard-worked is that of improper and insufficient material. When 
a man is berated for poor work, and presents the argument that he 
was unable to do so and so because he ordered material for it several 
weeks previously and the material has not yet arrived, the situation is 
embarrassing. The best preventive of this is to have small requisition 
blanks measuring about 2\ by 4J inches, made up into pads of about 
fifty each, and to give each foreman a pad. Each blank should have 
a space for the date, the articles ordered, the time when the article is 
needed, the particular part of the work where the article is needed, 



COST-ANALYSIS ENGINEERING 63 

the class of work for which the article is needed, and the fore- 
man's name. The foreman should then be instructed that material 
will be purchased through the storekeeper, and that non-delivery 
of material will not be accepted as an excuse. The storekeeper 
should then go around a job at least once a day, and get from the 
foremen their requisition slips; and an intelligent storekeeper will see 
to it that useless and unnecessary material or superfluous material 
is not ordered. Material that is ordered on requisition, and is not in 
the storehouse, should be purchased if necessary on a rush order, 
because, contrary to the ordinary apparent belief, it is economical to 
spend a dollar for material in order to save two dollars in labor. 

The Field Layout. In laying out the plan of campaign on starting 
a new piece of work, it is important to consider the proposition from 
the capitalization end, as well as from that of pure construction. It 
is usually not appreciated by the engineer or the owner, that the con- 
tractor is doing a piece of delicate financiering, for the performance 
of which his own available money is usually inadequate, and that he 
is therefore obliged to borrow money on the work as it goes along, 
and to depend upon his monthly estimates. It is sometimes specified 
in the contract, that the contractor shall own all of his plant in fee, but 
it may be said that this arrangement is seldom lived up to. He can 
in addition nearly always borrow the amount of his pay-roll a month 
in advance, from his bank. He can also sometimes borrow money, 
giving as security his interest in the money retained on the contract, 
which is ordinarily something like 10 per cent. Therefore, provided 
that all goes well, if he gets his estimates when they are due, if his pay- 
roll is not more than the amount of his monthly estimate, and if no 
very large and disastrous contingencies interfere with the progress of 
the work, the contractor can swing a large piece of work with a com- 
paratively small capital. If, however, things do not go well; if, 
through the failure of the owner's engineer, or through the insolvency 
of the owner, or through liens and attachments upon the work brought 
by dissatisfied creditors, the contractor does not receive his monthly 
estimates on time; if, in order successfully to prosecute the work, it is 
necessary for him to buy a large amount of additional machinery at a 
time when payments on old machinery are due; or if the portion of 
the work that he is doing is bringing him in less than the amount of 
his pay-roll and immediate materials and supplies, unless he has a 



64 COST-ANALYSIS ENGINEERING 

large capital back of him, which capital is at once available, he is 
liable to be placed in an exceedingly embarrassing position. At such 
a time, if there should come a period of financial stringency, bank- 
ruptcy may stare him in the face, even though he has at the same time 
a contract on which he can be reasonably sure of making a large profit. 

It is therefore of great importance that the work be prosecuted 
in such a manner as to have a continuous running profit, if possible. 
A contractor may turn in what is known as an unbalanced bid. In 
that event it will be very easy for him to start a certain portion of the 
work upon which he will lose money before he reaches the portion 
on which he expects to make money. Unless, as above indicated, the 
contractor is provided with a large fund for contingencies, great care 
should be taken to avoid this. The nature of unbalanced bids will be 
explained below. 

As a case in point, on a certain contract involving over a million 
dollars, the company that was organized to conduct the work was 
provided with a small working capital, bought its plant on a time 
basis, and proceeded with a small working capital, uuder the impression 
that it would not be necessary to borrow any money, that the work 
immediately commenced would be sufficient to pay all the expenses and 
leave a profit, which profit would gradually accumulate and enable a 
running fund to be maintained which would take care of future con- 
tingencies. The idea was admirable. It happened that the work 
was in earth and rock excavation also known as unclassified, and was 
taken at a price which would admit of a large profit in any event. The 
rock work, if taken economically, would cost more than the contract 
price; the earth work, if taken economically, would cost considerably 
less than the contract price. The original plan contemplated starting 
the earth excavation at a point to which another contractor was to 
excavate, and it was not deemed feasible to commence the earth 
excavation until the other contractor had cut up to the line between 
the two contracts. Dependence was placed upon the other contractor 
doing his work on time, which he did not do; and it was then decided 
that it would be impracticable to commence in the earth, and work was 
accordingly commenced in rock, which work was conducted at a con- 
siderable loss. The strong financial position of the contracting companv 
was the only thing that prevented it from going to the wall with a most 
excellent contract partly completed and a lot of good money tied up. 



COST-ANALYSIS ENGINEERING 65 

We shall assume, for purposes of illustration, that a certain con- 
tractor desires to bid on some public work involving the removal of 
100,000 cubic yards of earth work and 50,000 cubic yards of rock 
work. He estimates that he can do the earth work for 30 cents per 
cubic yard, or $30,000, and rock work for 80 cents per cubic yard, or 
$40,000, making a total of $70,000 for the entire 150,000 yards, or 
46.66 cents per yard for an average of the earth and rock; and he puts 
in his bid at this figure. 

If the contract has been obtained as one of the Erie Barge Canal 
contracts, the work will be let unclassified, as it is called. By this 
is meant that no discrimination in monthly estimates will be made 
between rock and earth removed; that the earth and rock removed 
will be measured in excavation, and the contractor will be paid for 
these two materials indiscriminately. Now, we shall assume that he 
can make a profit of 4 cents per yard on the earth, and 10 cents per 
yard on the rock, so that his total profit on the contract will be $9,000. 
According to the terms of his contract, he will be paid on the monthly 
estimates 46.66 cents per yard removed, less 10 per cent — or 42 cents, 
the 10 per cent being retained until the completion of the contract. 

Suppose, now, that he starts in on the rock, and he excavates 
the 50,000 yards at a cost to him of $35,000.00 for which he will 
receive 42 cents per yard, or $21,000.00. He will then be out of 
pocket $14,000.00; but there will be coming to him as held by the 
State $2,333.33. 

Before he can begin to "see daylight" on his contract, he must 
proceed to excavate earth until he has made up the $14,000.00. He 
gets 42 cents in cash, and it costs him 26 cents, so that he must exca- 
vate 87,500 yards of earth, for which he will get the $14,000.00, and 
he will have held up $4,083.33 additional. There will then be remaining 
12,500 yards to be excavated on which he will get $5,250.00, with 
$583.33 held back. He will have been obliged to do 91J per cent 
of his contract before he stops putting money into it; and the money 
that he has put into it he will not be able to draw interest on, because 
he will not be drawing interest on the 10 per cent retained. The 
amount of money that he had to put up to cover shortage on his con- 
tract will have been $14,000.00, on which he will have to pay interest 
to his bank. If, on the other hand, he commences the earthwork 
first, he does 100,000 yards of earthwork, costing him 26 cents, on 



66 COST-ANALYSIS ENGINEERING 



which he gets back immediately 42 cents, and he has $16,000 for 
working capital, in addition to $4,666.66 held up. He then does the 
rock work, and the rock work never exhausts his capital, and he 
has no interest to pay except on his plant, which he can easily do 
out of his $16,000. 

This is not only a practical problem in how to handle a contract 
without being wiped out financially, but it is an exceedingly impor- 
tant one as defining where the ultimate success in the operation lies. 
It can readily be seen that when a contract is taken on close figures, the 
entire success of the financial operation will depend upon the proper 
layout, as indicated above. 

Unbalanced Bids. We shall assume again, for purposes of illus- 
tration, that a certain contractor desires to bid on some public work 
involving the removal of 100,000 cubic yards of earthwork and 50,000 
cubic yards of rock work. He estimates that he can do the earthwork 
at a profit for 30 cents per cubic yard, or $30,000; and rock work 
for 80 cents per cubic yard, or $40,000. If the work in the above 
example were classified, and the contractor were paid so much money 
for each yard of rock and so much money for each yard of earth 
excavated, and his bid read 80 cents for rock and 30 cents for earth, 
it would be said to be a balanced bid. Other contractors, seeing his 
bid, would know that he considered that he could do the rock work at 
a profit at 80 cents, and earthwork at a profit at 30 cents. In 
order to prevent them from obtaining this information, the con- 
tractor can unbalance his bid, as it is termed; and in this event he 
would bid perhaps as follows — namely, 100,000 yards of earth at 40 
cents, or $40,000; and 50,000 yards of rock at 60 cents, or $30,000. 
The total amount of this contract would be the same, and he 
would make the same profit; but his competitors would be deceived 
as to his basis of doing work. 

The disadvantage of this from the contractor's point of view is 
that, in the event of an error having been made in an estimate of 
quantity, he might find himself doing less than 100,000 yards of earth 
and more than 50,000 yards of rock, in which event he would stand 
to lose money. 

Material Supply. In concrete work particularly, it is all-impor- 
tant that material — cement, sand, and stone — be promptly shipped, 
and at the same time not too promptly shipped. If the shipments 



COST-ANALYSIS ENGINEERING 67 

are not promptly made, there will be a failure of material to arrive, 
which will throw the men out of work, with all that this implies in high 
costs. If the material is shipped too rapidly, it will be necessary either 
to unload it into a stock pile, which will involve the re-handling of the 
material; or to pay demurrage charges to the railroad company, if 
the shipments are made by rail. 

In such work, at a time when there is likely to be any freight con- 
gestion in the country, stock-pile facilities should be provided to care 
for a supply of material to carry the work for one to two weeks. 

On a piece of work involving, say, two large concrete mixers ca- 
pable of mixing 300 yards of material each per day, there will be used 
900 yards of stone and sand per day, which, on a ten-day basis, will 
mean a very respectable stock pile. This 9,000 yards of material, 
costing perhaps one dollar per yard, means an investment of $9,000 in 
stock pile, on which interest must be paid at the rate of, say, per cent, 
or $2.00 perworking day, which means a trivial item compared with the 
advantages derived from having a constant supply of material. The 
total cost of this stock pile, in addition to interest, is the cost of 
one re-handling of material out of the stock pile, which at 5 cents per 
yard would be $450. This amount is very much less than the damage 
that would accrue from not having any stock pile at all. On most 
concrete jobs, there is usually provided a large storehouse for cement; 
and when the work has to go over from one working season to another, 
it is frequently the custom to leave the cement in storage. This is 
frequently a cause of loss of money, because the cement, being hygro- 
scopic, absorbs moisture from the atmosphere, and is liable to spoil in 
consequence. This can be avoided by keeping the storehouse dry 
and warm through the winter, but this again is an expensive matter. 

Old versus New Machinery. In planning construction work, the 
question always comes up as to whether to use old or new machinery. 
No hard and fast rule can be prescribed. A case occurred upon an 
important contract where there were needed some new boiler tubes 
for the boiler that ran the main supply pump. The purchasing agent 
of the contracting company, who happened also to be the President 
and Chief Engineer of the company, bought some second-hand boiler 
tubes, which were forthwith put into this boiler. The saving on the 
boiler tubes was probably $8 or $10. The loss caused by a breakdown 
of the same boiler was nearly. $50. In purchasing second-hand 



68 COST-ANALYSIS ENGINEERING 

material, if the material can be thoroughly and rigidly inspected, it 
is perhaps wise to purchase it, and sometimes money can be saved ; 
but as a general proposition, no second-hand material should be 
purchased for a contract, unless it is done with the determination of 
putting this material in first-class condition before it is used. The 
best inspection, as a general thing, will not disclose the exact con- 
dition of old material. By this it is not meant to intimate that new 
material should be purchased for every new contract. 

Use of Maps. A precaution on construction work that is very 
seldom taken by contractors generally, and one that is a most certain 
saver of money, is to have a complete map of the work to a large scale 
carefully prepared, on which should be indicated day by day the prog- 
ress of the work. This map, if kept up to date, will enable the 
manager of a company, or the president and directors, to know in 
detail the progress of the work, without necessarily going out on the 
work; and from it can be found the quantities of needed materials, 
such as rail, pipe, etc. 

btandard Instructions. Every organization doing field work 
would do well to follow the custom admirably illustrated by Frank B. 
Gilbreth, of issuing regular standard instructions to foremen and to 
employees generally. These instructions have been published in 
book form by the Myron C. Clark Publishing Company, and are an 
admirable example of the type. The idea follows that of the old 
Railroad Company's "Book of Rules" that will tend toward evading 
similar accidents in the future. In this manner eventually a con- 
tractor can obtain a control of his organization, and a freedom from 
accidents, that will be extremely valuable. 

Chronological Charts. These are intended to show the pro- 
posed time of completion in certain parts of the work. A valuable aid 
to a manager on work requiring a large amount of material, and where 
there is a small amount of available space, is a chart showing the time 
and quantity of expected materials and supplies. This will enable 
him to see at a glance where he may expect to be in the matter of his 
materials, and will tend to relieve his mind of one of its most annoying 
problems. These same charts can also show him the estimated times 
of completion of certain parts of the work. 



EXAfilNATION PAPER. 



COST-ANALYSIS ENGINEERING 



Read carefully: Place your name and full address at the head of the 
paper. Any cheap, light paper like the sample previously sent you may be 
used. Do not crowd your work, but arrange it neatly and legibly. Do.not 
copy tho answers from the Instruction Paper; use your own words, so that we 
may be sure that you understand the subject. Use the Carnegie Handbook and 
either Fowler's or Ketchum's General Specifications in this examination. 

1. What is the object of cost keeping and cost analysis? Of 
cost distribution? 

2. What is "cost?" 

3. What five essentials must a cost-keeping system possess? 

4. What are overhead expenses? 

5. What are the four most common ways of time-keeping? 
Give the basis of each method. 

6. What are some -of the difficulties that confront the time- 
keeper when taking time in the field ? 

7. How is brickwork measured ? plastering? pavement? earth- 
work? 

8. What is a bonus? How may a bonus system be applied to 
construction work, and what are some of its advantages? 

9. Devise a method for measuring the work done by a steam 
shovel in each shift. Method to be operated by an engineer or in- 
spector, and must be quick and easy. No instrument to be used. 

10. Upon what is the payment of the contractor from time to 
time based? . Does this always give the contractor all that is due him ? 

11. What is an unbalanced bid? Why are they sometimes 
used? What is the objection to them? 

12. What advantage can you see in process cost analysis? Make 
such analysis for erecting centering for concrete factory. 

13. Devise method for measuring brickwork so that work of 
each bricklayer can be determined and credited to the right man. 
Do same for dimension stone work. 

14. What advantages are claimed for the piece-work system? 

15. What is an unclassified contract in excavation? 



COST-AXALYSIS EXGIXEERIXG 



16. Wha t effect may discharges have on work? State both good 
and bad. 

17. Why avoid the storage of cement during winter when none 
is being used ? 

18. Should men be left in entire ignorance of the condition of 
work? How far should the distribution of information be made on 
the job. 

19. What principles should guide the design of new methods on 
work, and what opposition is likely to be encountered? 

20. Why are labor organizations generally opposed to piece-work 
and bonuses? 

21. What effect may slight raise of pay have on men's work? 
decrease of pay? 

22. What is the advantage of performance and efficiency charts 
over tabulated reports? 

23. What sort of foreman is most efficient? 

24. What is stum page? 

25. What is a differential piece-rate? 

26. What is the best way of getting the men to arrive on time 
in the morning? 

27. Why is it easier to estimate cost of work to be done by the 
daily men, than that to be done by the monthly men? 

28. How many men can a foreman suoervise while he is doing 
work himself? 

29. What is lost foreman's time? 

30. What are the advantages and disadvantages of punch-cards 
as against time-keepers' slips? 

31. How many men, ordinarily, can one foreman efficiently 
supervise in the field? 

After completing the work, add and sign the following statement: 

I hereby certify that the above work is entirely my own. 
(Signed) 



JAN 13 iao9 



